Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

Incapacity Benefit

Robert Wilson: If he will make a statement on his Department's plans to reduce the number of people claiming incapacity benefit.

John Hutton: The welfare reform Green Paper that we published in January set out our proposals to reduce the numbers claiming incapacity benefit by 1 million over the next decade. The proposals include extra investment in the successful pathways to work schemes, as well as replacing incapacity benefit with a new employment and support allowance in 2008.

Robert Wilson: I thank the Secretary of State for that answer. Has he seen the recent KPMG labour market research, which shows that a large minority of employers will not appoint incapacity claimants with a history of mental illness? What is his Department doing to help educate employers about the employability of previous sufferers from mental illness and has he considered offering grants to help employers with assessment, training and skills development for potential recruits?

John Hutton: I have seen the report to which the hon. Gentleman referred. It is an important issue; about 40 per cent. of people claiming incapacity benefit cite mental health as the reason for being unable to work. Pathways to work, as it is at present, will successfully address that issue. Conditioned management support is one way through the issue, but we stand ready to work with the private and voluntary sectors, and other parts of the public sector, to make sure that the reforms are a success for people with mental illness.

Roger Berry: My right hon. Friend has allocated £360 million so far for the national roll-out of pathways to work, which I warmly welcome. However, concerns have been expressed, not least by the Select Committee on Work and Pensions, as to the adequacy of those resources if we are to meet the Government's laudable objective of taking 1 million people off incapacity benefit over 10 years. Given that enabling someone to work reduces benefit payments and increases tax revenue and national insurance contributions, is my right hon. Friend working closely with the Treasury to ensure that the savings from more people achieving employment will result in more investment in pathways to work?

John Hutton: Yes, I work very closely with the Treasury on all such matters. May I express my appreciation for my hon. Friend's work in supporting many of the reforms? I draw his attention to the part of the Green Paper that set out our plans in relation to the new city strategy, which is one area where we will be able to make progress in the direction to which he referred.

Danny Alexander: Can the Secretary of State tell the House on what basis the £360 million for pathways to work was calculated and whether all that sum will actually be spent on the national roll-out of pathways to work, given a recent written answer that I received from one of the right hon. Gentleman's ministerial colleagues, which suggested that only a proportion might be spent on the roll-out of pathways to work?

John Hutton: The lion's share of that £360 million will be spent on the roll-out of pathways. We are funding the national roll-out of pathways properly and fully and over the next few years we shall be looking to deliver more of the scheme through the private and voluntary sectors, which will, I hope, provide scope for more efficiency and more effective use of public money. I can assure the hon. Gentleman and the House that pathways will be properly and fully funded; to do anything less would undermine potential for the success of the reforms, and we do not intend to do that.

Chris Bryant: Surely, it is not just about getting people off incapacity benefit and into work, but also about trying to make sure that fewer people end up on incapacity benefit. Has my right hon. Friend looked at the number of occupational health professionals working in the private sector and, if so, has he noticed that the level is one of the worst of any European country? Do not we need to move forward on that agenda, too?

John Hutton: Yes, we certainly do, and the Green Paper set out a number of areas where we hope to make such progress. I want to work closely with my colleagues in the Department of Health, where, together, we can make the biggest impact. It is also worth bearing in mind the fact that a third fewer people claim incapacity benefit than a decade or so ago; we are just beginning to see year-on-year reductions in the total number of people claiming it. I have no doubt that the reforms are working. My hon. Friend referred to prevention and I am quite sure there is more that we can do in that regard. We set out our intention to do more in that area in the Green Paper.

David Ruffley: Over the weekend we saw another report of Department for Work and Pensions Ministers running scared of their Back Benchers—this time, over US-style workfare policies. In evidence to the Select Committee, the Secretary of State said:
	"We are not proposing at the moment to sanction failing to take work-related activities...It might become so in the future."
	Can the Secretary of State come clean and tell us if in principle he supports such a workfare-style approach? If he does, when will he tell the parliamentary Labour party?

John Hutton: I am afraid that it is the hon. Gentleman who needs to grow up. We set out our proposals in the welfare reform Green Paper. I shall let the hon. Gentleman read a copy of it to refresh his memory.

Child Poverty

Roberta Blackman-Woods: If he will make a statement on trends in the level of child poverty since 1997.

John Hutton: In the two decades prior to 1997 the number of children living in poverty in the United Kingdom more than doubled. However, in absolute terms there are now 2 million fewer children living below the poverty line than when we came into office. This has been the result of investment in the new deal for lone parents, the introduction of tax credits, the introduction of the national minimum wage and our success in creating stable economic growth.

Roberta Blackman-Woods: I thank my right hon. Friend for that response. I hope that he will agree with me that constituencies such as mine in Durham have benefited enormously from measures that the Government have taken to tackle child poverty, with literally thousands of children being lifted out of poverty since 1997. Nevertheless, poverty is still disproportionately higher in the north-east than elsewhere. Will my right hon. Friend tell the House what the Government are doing to tackle regional inequalities in child poverty?

John Hutton: Yes. The new deal has been a huge success in my hon. Friend's constituency and throughout many parts of Britain that suffer from high levels of unemployment. The city strategy that we set out in the Green Paper will, I think, provide further targeted help in tackling worklessness in some of the most deprived parts of the country. Together with the other reforms in the Green Paper, I am sure that we will continue to make a significant impact on improving the opportunities for families with children to share in rising national prosperity.

Alistair Burt: In a debate on social exclusion in Westminster Hall at the end of last year, I asked whether the Government's social exclusion unit could examine the relationship of long-term family and relationship breakdown with long-term deprivation. Will the Minister make the same request in relation to child poverty? Will he also examine the work that is being done by many faith, independent and voluntary groups in supporting relationships that are in trouble? As a nation, it costs us a fortune to deal with the consequences of relationship breakdown in child poverty terms, yet we spend so little in trying to support those relationships.

John Hutton: I agree with a great deal of what the hon. Gentleman has said. I have decided to make the pursuit of the child poverty targets that have been set for my Department the No. 1 priority for the Department. I think that that is right if we are to break the cycle of deprivation and poverty between the generations. The social exclusion unit is the responsibility of my right hon. Friend the Chancellor of the Duchy of Lancaster. I will be working closely with her and the Minister of State to ensure that we make progress in this general area.

Frank Field: I congratulate the Government on nearly achieving their target of reducing the number of poor children by a quarter in five years. Does my right hon. Friend accept that probably the major reason why the Government have scored success in this area was the impact of tax credits, which cost the equivalent of a 5p reduction in the standard rate of tax? Given that that sort of money will not be available for the next five years, might my right hon. Friend, at some suitable opportunity, set out before the House how he intends to achieve another quarter's reduction in the number of poor children in the following five years?

John Hutton: Yes, I will certainly be doing that. I am grateful to my right hon. Friend for his support in this area. We shall have to focus our attention in a number of areas if we are to make continuing progress, not least in relation to how we can improve the operation of the child support arrangements. That is a piece of work currently being carried out by Sir David Henshaw.
	We will certainly have to consider how we can continue to make the new deal for lone parents effective. It has been hugely effective and we have seen a huge increase in the employment rate of lone parents—about 11 percentage points. We should continue to explore all these areas and avenues to ensure that we can improve the household income of families with children.

David Laws: On the issue of tax credits and poverty, has the Secretary of State had a chance to read the research produced by his Department last year, which concluded that the problems in the administration of tax credits had lent an unwelcome unpredictability to a key element of financial support. It went on to talk about the profoundly negative effects on more financially vulnerable households?
	Earlier, the Secretary of State indicated that he is working closely with the Chancellor of the Exchequer. May I encourage him to ask the Chancellor to consider that, as tax credits are no more than means-tested benefits, it would make far more sense to administer the credits from his Department than from the Treasury? Does the right hon. Gentleman accept that his Department could hardly do a less effective job of that?

John Hutton: Answer that one.
	I read a great deal of research and many reports. The particular report to which the hon. Gentleman refers, apparently from my Department, I have not yet managed to read. I will need to ask the hon. Gentleman for the reference number of the report. We examine carefully the administration of tax credits. It is wrong to suggest that somehow they have not been a significant benefit to millions of families with children. They have been a huge boon to millions of households. The Department currently has no plans to take on the administration of the tax credits system.

Karen Buck: Is my right hon. Friend aware that London is the only region where no significant progress was made in reducing child poverty for the first milestone in 2004? Does he accept that one of the key reasons for that is high housing costs? Typical of that is a constituent who came to me on Friday, who is in temporary accommodation—one of 3,000 families in temporary accommodation in my borough—who faces a rent bill of £430 every week. That is a ludicrous disincentive to work. Will he therefore take urgent action, with the Department for Communities and Local Government, to tackle the housing costs for those in temporary accommodation? Will he also agree to meet the London—

Mr. Speaker: Order. One supplementary question is fine.

John Hutton: I will certainly pass on my hon. Friend's concerns to the Secretary of State for Communities and Local Government. I remind my hon. Friend that the Prime Minister recently announced two significant projects covering the east of London and the west of London to try to bring more resources to improving employment prospects and to make the impact greater, but she is quite right to say that, sadly, it is still true today that 50 per cent. of children born in inner London are born into poor households—that is households that have 60 per cent. or less of the median income. That is not acceptable for us and we will continue to work across Government in ways that I hope that she will find sensible and an effective response to the problem that she has highlighted.

Jeremy Hunt: The Secretary of State knows that one in four children in poverty have a long-term sick or disabled parent. Does he also know that there are 13,000 children with caring responsibilities greater than 50 hours per week? That is a situation that can greatly aggravate the negative consequences of child poverty. In the context of eliminating child poverty, and given that we are at the start of national carers week, what specific measures does he propose to deal with the problems facing child carers?

John Hutton: The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling (Mrs. McGuire), who is the Minister with responsibility for disabled people, and I are currently developing a series of new proposals that will address some of the concerns that the hon. Gentleman has raised. I think that that was the first time that he has contributed to Work and Pensions questions, so I am grateful.  [ Interruption. ] It may not be, but it felt like perhaps it was.  [ Laughter. ] I hope that that is in no way disrespectful to the hon. Gentleman, whom we hold in high regard on this side of the House. My right hon. Friend the Secretary of State for Health also has responsibility in this area, and we are also addressing the issue through the spending review settlement.

National Insurance Numbers (Illegal Immigrants)

Andrew Robathan: What representations he has received on the allocation of national insurance numbers to illegal immigrants.

James Plaskitt: I have had a number of representations from hon. Members. Since the inception of the national insurance system in 1948, the allocation of a number has never been designed to confirm that an individual has the right to live or work in the United Kingdom. However, in order to tighten the system further and to build on improvements that we already made in 2001 and again in 2004, we propose to introduce a right-to-work condition that will have to be satisfied before a number is issued.

Andrew Robathan: I am pleased that the Government have finally taken note of this matter, but it was six years ago, in May 2000, that Lord Grabiner brought out his report, which highlighted the issue of illegal immigrants making national insurance applications. Why has the change taken six years? Why has it taken the Home Office scandals and fiasco to bring focus to this matter? I hope that the Minister will not tell us that the Government did act in 2000 and that everything was rosy, because if it was, why did they need to change the rules last week?

James Plaskitt: The hon. Gentleman should refresh his memory of what Lord Grabiner actually said. In paragraph 4.15 of his report, he said:
	"It is unlikely that a large proportion of illegal immigrants claim benefits...However, to the extent that they do...this is likely to be linked to...identity fraud."
	His specific recommendation was about identity fraud. We enacted it within a year by the introduction of the enhanced national insurance allocation system. In 2004, we amended his Government's legislation to strengthen the controls that employers have an obligation to put into place. The third improvement that we are making is to introduce the right-to-work condition. He should welcome that.

David Taylor: In relation to individuals whose asylum application fails although they are granted a national insurance number, would it be possible to incorporate in the number a field or pair or digits that showed their status so that the number could be de-registered when their application is refused? Is that not the way forward, as long we do not give the project to the Accentures, the EDSs and the Capitas of this world to mess up?

James Plaskitt: We do make records of such information at the point of dealing with the application, and that information is passed on to the immigration and nationality directorate.

Peter Viggers: I am reliably informed that in official circles there is widespread concern about the issue of temporary national insurance numbers and, indeed, multiple national insurance numbers to the same individual. On 2 March, however, the Department answered a question, saying that no temporary national insurance numbers were issued. Can he explain that apparent discrepancy?

James Plaskitt: Temporary numbers are issued in certain circumstances, but if there is doubt about an applicant's immigration status—as I said, if they are in employment a national insurance number is issued, and that has always been the case—the matter will be referred to the IND. If they are not in employment, or if we suspect that their documentation is false, a national insurance number is not issued.

Philip Hammond: We welcome the fact that the Minister has announced plans to introduce a test of legality before issuing NI numbers from next month, but what plans does he have to recall for interview with a view, if appropriate, to cancelling national insurance numbers, the 1,712 applicants whom he recently told the Chairman of the Select Committee on Home Affairs had been referred to IND over the period April 2005 to February 2006 as potential immigration offenders, but who were issued with national insurance numbers anyway?

James Plaskitt: Last year, we referred 2,537 cases to IND on the grounds of immigration irregularities. We also reported 772 suspect document cases, and my Department brought 773 prosecutions for false documentation.

Philip Hammond: That is very interesting, but the Minister omitted to tell us that he gave all those people national insurance numbers.

James Plaskitt: indicated dissent.

Philip Hammond: The Minister shakes his head, but the Chairman of the Home Affairs Committee certainly understood that to be the case. Let me ask him another question. In 2001, shortly after the Grabiner report, Jeff Rooker, the then social security Minister, said in Standing Committee in 2001 that techniques developed in the Balham project
	"of in-depth analysis and more systematic questioning about NINOs are being rolled out across the country, virtually as we speak"—[ Official Report, Standing Committee A, 9 April 2001; c. 74.]
	Bearing in mind that commitment, will the Minister confirm that the amount of time allocated for interviews with national insurance number applicants has been cut from one hour to 45 minutes, and that interviewers have been instructed to accept photocopies of passports and other documents, instead of the originals? Despite the message from the Balham project, Lord Grabiner's warnings, and Jeff Rooker's commitment to the House, the Government have continued to weaken controls over the issue of national insurance numbers to foreign nationals.

James Plaskitt: There were a great many points in the hon. Gentleman's question, but I shall respond to one or two. He said that national insurance numbers were issued willy-nilly: that is simply not the case. If our officials are aware of false documentation, national insurance numbers are not issued. He should bear in mind the fact that 20,000 applications for national insurance numbers were declined last year. The powers to which he referred in his long question are more robust following our implementation of Grabiner's recommendations, as there is now a four-stage process, which did not exist under the previous Administration. For third-country nationals, the first stage covers telephone discussion; the second stage establishes residency; the third stage involves a face-to-face interview for identity purposes; and the fourth stage involves additional evidence. An applicant may be required to submit up to 20 documents as proof of their identity.

Incapacity Benefit (Nottingham)

Graham Allen: What discussions he has had with One Nottingham regarding the establishment of a city strategy on incapacity benefit; and if he will make a statement.

John Hutton: Earlier this year, at the invitation of my hon. Friend the Member for Nottingham, North (Mr. Allen), I attended a conference held by One Nottingham where local plans for helping people on incapacity benefits return to work were discussed. We intend to announce next month the first wave of cities to take forward the new approaches outlined in the Green Paper.

Graham Allen: I thank the Secretary of State and the Minister for Employment and Welfare Reform for their personal interest in pursuing that application. We promise them that that will be forthcoming in the very near future. There are over 30,000 people in Nottingham on incapacity benefit and related benefits, and the strategy presents a great opportunity to impact upon that. Does my right hon. Friend agree, though, that the strategy must lie alongside other strategies on deprivation and regeneration, such as teaching youngsters social behaviour at school and tackling the 50 most difficult families, which One Nottingham is doing? Further to the question from the hon. Member for Reading, East (Mr. Wilson) about cognitive behavioural therapy and helping people get back on the bridge into to work, it may produce tight bottlenecks in the national health service as we try to tap into the supply of those therapists. Will my right hon. Friend ensure that there are sufficient cognitive behavioural therapists available to make his strategy a success?

John Hutton: I am grateful to my hon. Friend for the leadership that he is showing in his own city, taking forward those proposals. I have no doubt at all that Nottingham will provide a high quality bid when the process for applications has come to an end. There is a strong local partnership in Nottingham, and one of the things that struck me when I was there was the appreciation of the extent to which any successful strategy must be based on a broad approach. I agree with my hon. Friend about the importance of cognitive behavioural therapy. In the neighbouring pathways to work scheme to his in Derbyshire, the same problem of access to CBTs was encountered and the solution was to contract that service from the private sector. Where that can deal with the bottlenecks that my hon. Friend mentioned, it is the sensible way to proceed.

Remploy (Dundee)

James McGovern: If he will visit the Remploy factory in Dundee to discuss funding.

Anne McGuire: We announced to the House on 16 March 2006 the Government's intention to appoint independent consultants to conduct a strategic review of Remploy's future business options. I have no current plans to visit the Remploy factory in Dundee.

James McGovern: Last Tuesday the Minister announced that the review of the Remploy organisation is to be extended. The review has been extremely controversial in Dundee, where many of the Remploy workers feel that it is no more than a convenient cover to close down the Remploy factory network, particularly the Dundee factory, which has one of the best business cases not only in Scotland, but in the UK. Will my hon. Friend agree to visit the factory with me to reassure those workers and reaffirm that the review is not simply about closing their factory?

Anne McGuire: I know of my hon. Friend's great interest in the Remploy factory in Dundee, both as a Member of Parliament and previously as a full-time officer of the GMB, which is the predominant union in the Dundee factory. Working closely with the trade unions and other stakeholders, we have tried to ensure that there is no pre-judging the outcome of the review. I await the result of the PricewaterhouseCoopers review, and at an appropriate time I will be delighted to visit Dundee and to include a visit to my hon. Friend's factory.

Brian Iddon: Over 80 towns and cities in Britain have Remploy factories. Does my hon. Friend agree that those considerable assets in terms of buildings and the skills of the staff there could be used to establish a much closer relationship than has existed hitherto between Remploy and the other Department for Work and Pensions agencies, such as pathfinders to work?

Anne McGuire: That depends very much on the local relationships. In some areas there is a close relationship between Remploy and its interwork, as well as its factory network, and Jobcentre Plus or pathways to work. We want to ensure that we maximise the impact of the support that we give to disabled people seeking employment. I certainly take my hon. Friend's comments on board and will ensure that as far as possible we have a close working relationship not just with Remploy, but with other supported factories and workstep through the country.

Incapacity Benefit

Mark Lancaster: What percentage of incapacity benefit recipients have had a full medical examination in each of the past five years.

Jim Murphy: We carry out periodic reviews to monitor ongoing eligibility for benefit. The frequency of those reviews depends on claimants' circumstances and conditions. Approximately 65 per cent. of new claims involve medical examination.

Mark Lancaster: Citizens Advice has warned that plans to reform incapacity benefit in the welfare reform Green Paper will fail unless changes are made to the way in which people are assessed. Will the Minister concede that significant improvements are needed to the medical assessment gateway?

Jim Murphy: I am tempted simply to say yes, but that would do the hon. Gentleman's question a disservice. Citizens Advice has carried out its work thoroughly, and it welcomes the approach in the Green Paper. We need to review the personal capability assessment, because we need to assess every individual's ability not to rely on benefit for life, but to get closer to the labour market and participate in active employment.

John Robertson: As the Minister knows, the tests of people on incapacity benefit sometimes consist of no more than a chat across a table, after which claimants are sometimes refused incapacity benefit. Will he allay my fears and assure me that doctors will do the job properly and that proper guidelines will be introduced to ensure that people are not called to tests for the sake of it?

Jim Murphy: My hon. Friend is right. If he has particular examples of the practices that he has described, I would obviously be willing to meet him and discuss them. Doctors have conducted more than 493,000 examinations of incapacity benefit claimants, and the number of complaints about their conduct is very small—in extreme cases, such complaints have led to doctors being struck off. We must get the matter absolutely correct, and we intend to do so as we move towards the introduction of the employment and support allowance, which is identified in the Green Paper.

Vincent Cable: In many cases, NHS examiners directly contradict claimants' GPs and consultants. Since half of appeals are upheld, surely more radical action is required to raise the professional standards of the people who carry out those examinations for the NHS.

Jim Murphy: The medical profession is involved in different ways in such cases—the individual's GP carries out the diagnosis and the medical examiner assesses the impact of that condition on that person's ability to work. As Citizens Advice has pointed out, we must get such cases right first time. About 8 per cent. of cases end up going through the appeal process. That percentage is too high, and we intend to act further to reduce it as we move forward with proposals in the Green Paper.

Anne Begg: On Friday, I discussed that issue with a GP in my constituency, who made it clear that he does not want a role in assessing whether someone is fit for work, because he thinks that that might ruin his relationship with his patients, but he would welcome others working alongside his practice to encourage people into work. Will my hon. Friend consider redesigning the personal capability test to make it wider than a medical examination and to take into account social factors, which is what disabled groups are calling for?

Jim Murphy: My hon. Friend has correctly identified some of the past weaknesses in the assessment process. We are involving stakeholders and professionals in order to ensure that we get the review of the personal capability assessment absolutely right. Again, if my hon. Friend knows about case studies from her constituency or wants to feed in the experience of local GPs, I am happy to listen. She has made the important point that GPs are involved in diagnosis with patients while medical examiners currently assess the impact of a condition on a person's ability to work, and we remain committed to that important distinction. We must work more closely with GPs, and we will.

Child Support Agency

Adam Holloway: If he will make a statement on the recent performance of the Child Support Agency.

James Plaskitt: As my right hon. Friend the Secretary of State has already said, the overall performance of the agency is still not acceptable. However, there have been improvements in some areas. The agency's operational improvement plan, published in February, set out the immediate priorities for improvements in client services and enforcement. Also, as we have already announced, Sir David Henshaw has been asked to report on his proposals for a redesign of child support policy and delivery before the summer recess.

Adam Holloway: Staff at the agency say that the current reorganisation will lead only to more backlog. When Sir David Henshaw concludes his report, that may lead to further disarray. This situation has been an absolute nightmare for many of my constituents and, I guess, those of Members on both sides of the House. When do the Government think that they are finally going to sort out this farce?

James Plaskitt: I know that many of the hon. Gentleman's constituents are frustrated about the state of the CSA, and I think that that feeling is shared by our constituents across the country. However, the staff inside the agency, who work very hard to deliver its services in difficult circumstances, are right behind our drive to improve its performance. They want to be part of a successful Child Support Agency.
	I reject the hon. Gentleman's comments on the backlog. Although it is still considerable, at more than 300,000, it has fallen over the past year. The additional staff whom we are putting in should enable us to bring down that backlog even further as we move forward with the improvement programme.

Mark Francois: Many of us have come to the reluctant conclusion from our constituency casework that the CSA is essentially broken. That being the case, and as we await the Henshaw review, can the Minister give us an absolute guarantee that Ministers will come to the House prior to the summer recess and give us a statement about exactly what the Government plan to do, bearing in mind that their previous statement promised only yet another review?

James Plaskitt: As I said in my initial answer, we have asked Sir David Henshaw to report before the summer recess, and we intend to make a statement to the House about that.

Andrew Selous: If he will make a statement on the length of time taken by the Child Support Agency to secure court hearings for non-resident parents who are not making the child support payments required of them.

James Plaskitt: The operational improvement plan sets out the immediate priorities, including improved enforcement. The agency has already established a working group with the Magistrates Association, the Department for Constitutional Affairs and the Justices' Clerks Society, aiming to develop a faster and more effective court referral process. As a further step in speeding that process, we will pilot the centralisation of magistrates courts' cases.

Andrew Selous: My constituent, Lorna Leech, has sought justice from the CSA for more than 10 years. She is owed more than £30,000 of child support, and now her children are nearly grown up. Does the Minister think it acceptable for the CSA to wait for more than eight years to take that case to court, and then to seek an adjournment of a subsequent hearing? Does he agree that children are only young once, and that justice delayed is justice denied?

James Plaskitt: I agree with the hon. Gentleman—that is an unacceptably long wait for action. I am aware of some of the details of Miss Leech's case. I understand that the agency has brought four separate liability orders in respect of her case, over a considerable period, but there is still no action in the courts. That is an unacceptable delay. I hope that the process will be speeded up. I am happy to meet the hon. Gentleman to go into the case in more detail, and I will offer any help to him and his constituent that I can.

Philip Dunne: Is it not the case the Sir David Henshaw's brief has been restricted, and that he is therefore unable to undertake the root-and-branch review of the CSA that would allow him to consider the entire structure of child support in this country? He could, for example, look to other countries with a much more successful record in payment, such as Australia. Is that part of his brief, or not?

James Plaskitt: I do not know where the hon. Gentleman got his information, but it is nonsense.

Jobseeker's Allowance

Jim Cunningham: How many people have outstanding claims for jobseeker's allowance in Coventry, South and the west midlands.

Jim Murphy: For the week ending 2 June, there were 153 people with outstanding claims for jobseeker's allowance in the Coventry and Warwickshire district, and 5,291 in the west midlands.

Jim Cunningham: I thank my hon. Friend for that answer, but can he tell me what he is doing to reduce the waiting time in relation to the processing procedures for those claims?

Jim Murphy: Specifically in the west midlands, we are using facilities and staff in other parts of the country to clear the backlog to which my hon. Friend persistently, and very effectively, refers. The new figures from Jobcentre Plus on the clearance and processing of benefits will be out tomorrow. If they have not improved to the extent that he and I wish and expect them to, I am happy to meet him to discuss what further can and should be done.

National Insurance Numbers (Illegal Immigrants)

David Jones: What estimate he has made of how much has been paid in benefits to illegal immigrants issued with national insurance numbers in the past five years.

James Plaskitt: An employment-related national insurance number would usually be issued to third country nationals only if they presented proof of employment. If our officials had grounds to suspect illegal working, the matter would be referred to the immigration and nationality directorate. Our proposed right-to-work check will strengthen those arrangements.
	Furthermore, possession of a national insurance number in itself is insufficient evidence to gain access to social security benefits. Robust checks to confirm identity, as recommended by the Grabiner report, are in operation.

David Jones: The Minister has already quoted Lord Grabiner. However, is he aware that last week Lord Grabiner said:
	"One of my key concerns was that if you got hold of an NI number then it gave you access to all kinds of benefits—everything that was going."?
	Is not the Minister's inability today to give an estimate of the benefits paid to illegal immigrants a further indication of the utter incompetence with which the Department has handled the issue?

James Plaskitt: I will again refer the hon. Gentleman to what Lord Grabiner said in his report, which is that
	"it is inherently difficult to give an accurate estimate of the numbers involved".
	That was his opinion in 2000. His report did not refer to individuals' right to work in this country being part of the national insurance application process.

Philip Hollobone: May I draw the Minister's attention to illegal immigration in Kettering and the problem of legal migrants being subject to illegal terms and conditions of employment? Responsibility for those issues appears to fall somewhere between the IND, the Paymaster General and the Department. Is the Minister satisfied that there is effective Government co-ordination between all three Departments on those matters?

James Plaskitt: There is some sharing of responsibility. However, the Conservative Government's legislation—the Asylum and Immigration Act 1996—placed considerable responsibility on employers to establish whether people applying for a job had a right to work in the United Kingdom. We strengthened that legislation in 2004 and we also implemented the Grabiner report's recommendations. The system is therefore far more robust now than the one we inherited. We recently announced a further improvement.

Pension Provision

Chris McCafferty: From what date carers will be credited with basic and second state pension entitlements under the proposals in the White Paper.

James Purnell: We propose that the new crediting arrangements for carers will apply from 2010. On its own, the new carers credit will mean that approximately 70,000 more carers could gain credit to the basic state pension. It will also help around 110,000 more women and 50,000 more men to gain credits to the state second pension.

Chris McCafferty: I thank the Minister for that reply. The White Paper is a bold move forward and will ensure that many carers get increased pension rights. However, does my hon. Friend know that a quarter of all women between the ages of 50 and 59 are in a caring role? Much of the time that they have spent caring has been before the introduction of home responsibilities protection and credits. Will he ensure that those women will not lose out when the excellent proposals are implemented?

James Purnell: That is the key group at which the reforms are aimed. They will be helped especially by the reduction in the number of qualifying years to 30. Approximately 30 per cent. of women currently reach retirement age with full entitlement to a basic state pension. In 2010, the figure will be 70 per cent. and it will be 90 per cent. in 2020. That will help exactly the group that my hon. Friend mentioned.

Jobseeker's Allowance

Andrew Rosindell: What recent assessment he has made of the level of overpayment of jobseeker's allowance; and if he will make a statement.

James Plaskitt: I am grateful for that question. We have significantly reduced the level of overpayment of jobseeker's allowance. The overpayment level that we inherited in 1997 represented 13.2 per cent. of JSA expenditure. I am happy to tell the hon. Gentleman that the latest estimate is that, thanks to our measures, the loss is down to 6 per cent. of JSA expenditure. We will not stop there—we shall continue to strive to reduce that even further.

Andrew Rosindell: I thank the Minister for his response, but is not the true story that, since the 1997 general election, 910 million overpayments have been made? Will he reassure hon. Members that, with rising unemployment—44,000 jobs lost in the previous quarter ending in March—JSA overpayments will be reduced further? The Department appears to be managed incompetently when so much money is being given away unjustifiably.

James Plaskitt: I think that our record speaks for itself. When the Conservatives were in government, they did not accurately measure what was going on—that is how bothered they were about the issue. We have far more robust systems of measurement in place, however. The hon. Gentleman has asked me for more information and reassurance, so let me break down the figures for him. The level of loss in jobseeker's allowance to fraud in 1997 was £300 million; last year, it was £50 million. In 1997, the level of loss in JSA to official error was £150 million; last year, it was £50 million. That illustrates the progress that we are making, and we shall continue to make it.

Pension Provision

Lynda Waltho: If he will estimate how many women will be entitled to a full basic state pension by 2025.

James Purnell: Almost 5.5 million women will be entitled to a full basic state pension by 2025.

Lynda Waltho: I thank the Minister for his answer. On Saturday, at the start of carers week, I visited a massive display of all the carers' associations and organisations within Dudley. Many of the carers that they represent are women, and I was lobbied quite specifically about pension entitlement. Those women will be happy to hear the answer that the Minister has just given me. Will he undertake to visit Dudley to meet some of them, to explain their entitlements and to listen to the significant issues that some of them have about the substantial care that they provide?

James Purnell: I would be delighted to visit Dudley to do exactly that. I am going to King's Lynn later this week in the context of carers week to explain our proposals, which will be extremely good news for carers. We are modernising the contributory principle because we need to recognise the contributions that people make, not only through work but through child care and other forms of care. That is exactly what we are doing.

Benefit Entitlements

David Heathcoat-Amory: What discussions he has had with the Treasury on departmental responsibilities for the benefit entitlements of those in work.

Jim Murphy: There are regular discussions between departmental officials and officials in the Treasury on the operation of the tax credit scheme and its interaction with Department for Work and Pensions benefits.

David Heathcoat-Amory: As the Minister knows, the tax credit system is a complete shambles from start to finish—so much so that some of my constituents have been sent a letter stating:
	"Unfortunately the forms"—
	about how to complain—
	"are not available but will be sent to you as they become available."
	So, people cannot even complain about this mess, which has been caused by the Treasury's power grab for this aspect of policy and by the Chancellor's obsession with gaining control of every aspect of domestic policy. Will the Minister's Department now assert itself and get back under its control this aspect of policy that is vital for so many people on low incomes?

Jim Murphy: The right hon. Gentleman will be aware that tax credits are benefiting 6 million families and about 10 million children throughout the United Kingdom. They have also played an important part in helping to lift 700,000 children out of poverty. Of course, I reiterate the apology that has been offered by other Ministers for the mistakes that have been made in the operation of the tax credit system and for the difficulties that they have caused. However, I do so, in the expectation that Conservative Members will offer an apology for voting against the creation of the system in the first place. Of course it is regrettable that the right hon. Gentleman's constituent has to wait for the forms, but if we were relying on him and his party, they would still be waiting for the creation of the tax credits themselves, and for the alleviation of poverty that they have brought about.

Financial Assistance Scheme

Henry Bellingham: What further plans he has to extend the financial assistance scheme.

James Purnell: As we announced in the White Paper on pensions reform, eligibility for the financial assistance scheme will be extended to all those who meet the other qualifying conditions and were within 15 years of their scheme's pension age on 14 May 2004. This means that about 40,000 people will receive assistance totalling more than £2 billion over approximately 50 years.

Henry Bellingham: Is the Minister aware that many of my constituents lost their company pensions when Albert Fisher went into receivership? At first, they welcomed the announcement to extend the Financial Services Authority scheme and assumed that they would be entitled to 80 per cent. of their original pensions. However, the company pension expert, Ross Altmann, has looked into various matters, including the non-indexation of capital sums, and it would appear that my constituents may only get 20 per cent. of their original entitlement. Is that the case?

James Purnell: No, that is rubbish, actually. We made our proposals, and the fact that there would be taper, absolutely clear. That will help us to reach more people and it amounts to a significant extension of the scheme from £400 million to £2.3 billion. Unless the Conservative party is going to provide more funds to extend it even further, it should accept what we have done and welcome it.

HOUSE OF COMMONS COMMISSION

The hon. Member for North Devon, representing the House of Commons Commission was asked—

House Staff

Andrew Robathan: What checks are undertaken into the immigration status of people working for the House.

Nick Harvey: The Department of Finance and Administration carries out checks on the immigration status of all candidates at the interview stage of the recruitment process for prospective employees. Candidates must provide original evidence of their eligibility to work in the UK based on a limited list of acceptable documents, which follows Home Office guidelines.

Andrew Robathan: I thank the hon. Gentleman for that answer, but there has been some regrettable publicity surrounding the Home Office and the way in which it has recruited illegal immigrants, often to work as civil servants. As I wander around the House early in the morning, I discover people from Francophone Africa, working for contractors— [Interruption.] I come into work very early. They are working for contractors to clean the offices, which they do perfectly well, but I suggest that it would be very embarrassing if they were found to be illegal immigrants. I trust that such people will be investigated.

Nick Harvey: I hope that the hon. Gentleman is not jumping to any conclusions about people's immigration status simply because he encounters them working in the House. The contractors and agencies that supply temporary staff are responsible for checking the immigration status of staff and guidance has been given about how to do so. They have to sign a declaration to confirm that they have carried out the necessary checks and they have to provide the relevant documentation. The hon. Gentleman should therefore rest easy, as the proper checks are in place.

LEADER OF THE HOUSE

The Leader of the House was asked—

House of Lords Reform

Simon Hughes: What the timetable is for the cross-party talks on the future of the House of Lords.

Jack Straw: The hon. Gentleman will be aware that the Joint Committee on Conventions has now been set up and is receiving evidence. Tomorrow, my ministerial colleagues in the House of Lords and I will appear before it. I am also arranging to bring forward an order to extend its deadline from the end of July to the end of this Session. An order to that effect has already been laid in House of Lords and will come before this House, assuming that it is passed, as soon as possible. Meanwhile, I will hold informal consultations with the other parties, Cross Benchers and bishops. The hon. Gentleman knows that I am meeting him and other members of the cross-party group to discuss the way forward next week.

Simon Hughes: I am grateful for that answer, but I seek clarification of what now appears to be the timetable. The Joint Committee is likely to work until the autumn and then report. Should there be a chance for the cross-party discussions to take that advice, information and recommendations into account? Should the House of Commons then be able to deliberate and then the Government formulate their views, hopefully before next year and on a consensus basis, before putting them to both Houses of Parliament?

Jack Straw: The hon. Gentleman is right to say that we all hope and pray to find a consensus on this matter, but we never know. It is the failure to find such a consensus in the past that has left us with a less than satisfactory status quo. As to the time scale, we will have lost some months by extending the deadline for the Joint Committee. My intention is to run the all-party discussions, including within the group, in parallel with the Joint Committee's sittings, but not in a way that pre-empts the conclusions. We should gain a fairly clear idea about the direction in which it is moving towards October and November, and I hope that we can try to bring all these issues together either this side of the turn of the year or just the other side of it.

Gordon Prentice: My friend will have read early-day motion 2307, on the reform of the Canadian Senate. Does he expect the Joint Committee to look at what is happening now in Ottawa to see whether that gives us any way to move forward in reforming the House of Lords?

Jack Straw: The Wakeham commission took at lot of evidence about parallels with other second chambers, and I may tell my hon. Friend that the manner in which other second chambers operate, the balance of power between them and the first chamber and their systems of election and appointment are all the experiences that we need to look at very carefully before making our own decisions.

Patrick Cormack: In thanking the Leader of the House for his over-modest extension of the deadline, may I ask him to confirm that he will meet that very large informal all-party group from both Houses, which includes a former leader of the Liberal party and a former leader of the Liberal Democrats in the House of Lords, and that he will listen very carefully to the unanimous view of that group, which does not believe in electing any Member of the upper House?

Jack Straw: Arrangements are in hand to see the hon. Gentleman, who is a leading member of that group, but the passion with which he puts an otherwise prosaic point simply about holding a meeting illustrates the difficulty of trying to find a consensus on this issue.

Petitions Committee

John Robertson: What assessment he has made of the merits of establishing a petitions committee.

Nigel Griffiths: Like all hon. Members, the Leader of the House and I are keen to encourage greater public participation in our democracy. The Power report, "Parliament First" and the Modernisation Committee have made positive suggestions about making better use of public petitions. I am grateful to the Procedure Committee for devoting time and resources to the issue, and we look forward to being able to act on its findings.

John Robertson: I thank my hon. Friend for his answer. He obviously agrees with me that the Petitions Committee that has been set up in the Scottish Parliament has been shown to be in touch with the people, groups and professionals with petitions, which are vital to people. Will he continue to go down that road and ensure that he and the Leader of the House consider a petitions committee to try to engage the general public more in politics and the House?

Nigel Griffiths: I entirely agree with my hon. Friend—the Scottish Parliament's Public Petitions Committee has been widely praised by people from all parties and those of no party. We recently made a change—some saw it as a landmark change—whereby petitions no longer need to be hand written but will be accepted in hard copy. I think that we can go a lot further than that.

David Heath: I rather hope that we might. Certainly, the Public Petitions Committee in Scotland has been judged a great success—indeed, I believe that it is being emulated by the German Bundestag—so it is something that we should seriously consider. However, is there not a disjunction between what people are thinking at a certain time and want to put before Parliament, what Members want to put before Parliament, and what gets on to the Order Paper? Is there not a case not only for a petitions committee, but for finding a proper way to consider early day-motions signed by a great number of Members? For instance, early-day motion 1531 on Post Office accounts has been signed, as he knows, by more than half the membership of the House. Is there not a good case for putting that before the House in the form of a debate?

Nigel Griffiths: I certainly have no doubt that there is a disjuncture between what Liberal Democrat MPs may be doing and what the public think, and we are keen to find a mechanism that takes account of the public filling in petitions. I am keen to look at solutions to the issues that have been raised by us and in some of the reports that I have mentioned, such as the increased volume of petitions, as compared with those in the devolved Parliament in Scotland, and so on. I am sure that those obstacles can be overcome and I believe that we are at least united in wanting to ensure that the public have a better mechanism for being able to participate in discussions in the House. That is a way forward, and I look forward to the Procedure Committee coming up with some very solid recommendations that have all-party support.

Theresa May: I am grateful to the Deputy Leader of the House for the helpful tone in which he is responding on this issue. Although I never thought that I would stand here and say it, I think that we can learn something from the Scottish Parliament in relation to a petitions committee. However, there is a real difference between what the many thousands of people, who often sign petitions and who work hard to get signatures on petitions, feel will happen as a result of bringing their views to the House and to the Government, and the way in which those petitions are handled. We need to find a way in which people's views are taken more seriously by the Government and the House when they have gone to all that effort.
	On a technical point, may we please—I know that the Procedure Committee is looking into the petitions issue—find a way to accept petitions by e-mail? Many people find it so strange that they cannot e-mail signatures on petitions.

Nigel Griffiths: I agree with the right hon. Member and I thank her for her constructive support for the proposals.

HOUSE OF COMMONS COMMISSION

The hon. Member for North Devon, representing the House of Commons Commission was asked—

House of Commons Chamber

Graham Allen: If the Commission will agree with the Royal Institute of British Architects the rules and prize for an architectural competition to redesign the House of Commons Chamber; and if he will make a statement.

Nick Harvey: The Commission has no plans to sponsor such a competition.

Graham Allen: Does the hon. Gentleman feel that there would be greater public interest in debates in the House, which are watched and listened to by very few people, were the debates more worth listening to— [ Interruption]. Does he feel that a wider group of members of the public, architecture students and architects' practices could help us to build a Chamber that was more conducive to genuine debate —[Interruption]—as opposed to posturing and shouting from a sedentary position, as is being demonstrated at this very moment, thereby making my argument?

Nick Harvey: When the hon. Gentleman raised a similar point a while ago, I suggested that he should approach the Modernisation Committee if he wanted to test the degree of support that he had among his colleagues. I am not aware of his having done that. Alternatively, he might like to table an early-day motion to test support for any idea that he might wish to put forward.

George Young: Is the hon. Gentleman aware that public esteem for Members of Parliament might be further lowered were we to decide to spend scarce public resources redesigning a Chamber that works perfectly well?

Nick Harvey: As I said, the Commission has no plans to sponsor such a competition.

Points of Order

Bob Spink: On a point of order, Mr. Speaker. I seek your help. Castle Point has serious antisocial behaviour problems, and I have spent some of my time over the past few weekends persuading residents not to get together in vigilante groups in order to go out on to the street late at night to protect their community, as that would be dangerous and unhelpful to the police. Has the Home Secretary indicated that he will come to the House and explain his new policy of encouraging residents to take control of their streets late at night, which seems dangerous?

Mr. Speaker: The hon. Gentleman can put both written and oral questions to the Home Secretary.

Graham Stuart: On a point of order, Mr. Speaker. As the stoutest defender of Back-Bench rights and of new Members such as me, will you give me some guidance? I wrote to the Minister for Housing and Planning at the then Office of the Deputy Prime Minister on 24 January seeking a meeting to discuss planning conditions in relation to residential homes for troubled young people. When I did not receive a response, I followed up with another letter on 25 April. I phoned her office on 19 May and was told that my letter had gone from official to official and that no one had dealt with it, but that a reply would be sent within the next couple of days. Nothing further came, so my office called again on 31 May and we were told that investigations would be made and that we would be telephoned back shortly. Will you give guidance on this lamentable situation?

Mr. Speaker: If the hon. Gentleman sends me the details of the question, my officers will investigate the matter.

David Winnick: On a point of order, Mr. Speaker. The Foreign Secretary has rightly condemned the massacre of a Palestinian family that left only a seven-year-old girl as a survivor. The Foreign Secretary's condemnation is welcome, and I have always condemned suicide bombings. Is there any way in which you could use your influence, Mr. Speaker, so that an oral statement can be made in the Chamber before Foreign Office questions? There is very great concern over what occurred.

Mr. Speaker: The hon. Gentleman is well aware of the procedures of the House. If he feels that there should be an oral statement, he can apply for an urgent question. I give no guarantee as to whether that urgent question will be granted.

Orders of the Day

Fraud Bill  [Lords]

[Relevant document: the Fourteenth Report from the Joint Committee on Human Rights, Session 2005-06, Legislative Scrutiny: Sixth Progress Report, HC 955.]
	 Order for Second Reading read.

Mike O'Brien: I beg to move, That the Bill be now read a Second time.
	The Bill will reform the criminal law on fraud and dishonestly obtaining services. It applies to England and Wales and to Northern Ireland; Scotland has different provisions.
	We know that fraud has a massive impact on the United Kingdom economy. It is difficult to give precise figures, because fraud is by nature secretive, but in 2000 National Economic Research Associates estimated that it cost the UK economy £14 billion. In 2004, Norwich Union suggested that the cost had risen to more than £16 billion. Despite the public perception that most fraud is a victimless crime, the reality is that it hits most of us. We all pay higher prices for security systems, banking services, credit and goods, and of course we also pay higher premiums for insurance. If the Norwich Union estimate is right, fraud is costing each household more than £650 a year.
	Tackling fraud and the provisions of the Bill are therefore important to everyone. The Government's strategy for tackling fraud has three aims. The first is to get the law right, and is the reason for the Bill. The second is to improve the investigation of fraud by the police and other agencies. The third is to ensure that the courts deal expeditiously and effectively with fraudsters. The investigation of fraud is being considered by the fraud review that the Attorney-General is currently leading, and which is expected to report soon. I shall return to that later. We have also agreed to deal with the issue of trials, particularly the contentious question of non-jury trials, in another Bill.
	This Bill was the subject of a great deal of discussion in another place. By the end there was broad all-party support for most of its provisions, although I am sure that Opposition Members will want to test the detail in Committee.
	Strange as it may seem, no general offence of fraud exists today. When lawyers talk of fraud, we refer collectively to a wide and complex array of deception and theft offences. The Theft Acts and the common law, compiled somewhat haphazardly, have the task of encompassing the wide range of fraudulent conduct.
	In 1998, the Government asked the Law Commission to review this area of law. The commission conducted a lengthy and painstaking review, for which we thank it, producing a report in July 2002. Unsurprisingly, it concluded that the existing law on fraud was deficient and proposed changes, most of which found their way into the Bill. It identified certain key problems. First, the deception offences in the Theft Acts tend to be specific and narrow, which makes them vulnerable to technical assaults. Defence lawyers are often able to argue that a particular behaviour fell just outside the definition of the offence with which the defendant was charged, or that the defendant was charged with the wrong kind of deception and so ought to be acquitted. Defendants may indeed face the wrong charge or too many charges, and indictments may be excessively complex because of charges relating to various alternative counts.
	Secondly, deception is an essential ingredient of the offence. That requires a victim to be deceived. However, a shop assistant who accepts a card for payment may be indifferent about whether the cardholder has authority to use the card as long as the payment goes through. Machines and computers have generated new problems. For example, a ticket machine has no mind of its own: can it be deceived? What of problems such as internet phishing? The more we use machines to obtain goods and services, the greater such problems are likely to become. So far the old laws are coping with those developments, but the signs of stress are beginning to show.
	The Law Commission rightly took the view that it was unrealistic merely to plug the loopholes in the deception laws, or to try to create a new collection of specific new deception offences, as such piecemeal reform would produce even more complexity. Instead, the commission recommended a new general offence of fraud that would make the law more comprehensible to juries, would be fairer to defendants by making the law more straightforward, and would encompass fraud in its many unpredictable forms. In proposing that change, the Law Commission made two specific recommendations in relation to the law. First, the focus should be on dishonesty rather than on deception. Secondly, proof of gain should no longer be essential to proving the crime: it should be enough that the offender intends to make a gain for himself, to cause a loss to another, or to expose another to a risk of loss.
	The Bill creates the general offence of fraud in clause 1. It will replace provisions in our law that are in daily use in the courts. It is important that we get those changes right. That is why, in 2004, after the Law Commission's report, the Government decided to carry out a further consultation on the proposals. The consultations showed wide support for the proposal for a new general offence. Most stakeholders agreed that it would be right to focus the crime on the dishonest behaviour of the defendant, rather than the deception of the victim. Most also agreed that the Law Commission was right to reject the idea of a very broad offence of dishonesty, which risked being too uncertain.
	The general offence in clause 1 requires not only dishonesty and the intention of making a gain or causing a loss, but one of three other elements, which must be met before the crime can be charged. The three elements are: fraud by false representation, fraud by failure to disclose information, or fraud by abuse of position. Let me briefly describe each of them.
	Fraud by false representation is set out in clause 2. The extra element is that the offender makes a false representation knowing that it is, or might be, false or misleading. The types of representation covered may be of fact or law, including making a representation as to a person's state of mind. There is no restriction on whether it is written, spoken or in non-verbal communication. The representations can be implied or expressed in any form. For example, it can be done by entering a stolen chip or PIN into a machine or by internet phishing, where someone puts a letterhead on an email suggesting it has come from a bank in order to elicit a victim's financial details.
	Under the second limb of the offence, fraud by failing to disclose information, the extra element is that the offender fails to disclose information that he has a legal duty to disclose. There were some differences of view on that proposal between the Law Commission and others. The commission's report proposed covering circumstances where there was no legal duty to disclose but where one person trusted the other to disclose—where there was some kind of moral responsibility, for want of a better phrase—but in the Government's consultation, although there was widespread welcome for that limb of the general offence, the issue of going beyond a legal duty was questioned.
	Some—for example, the Association of Chief Police Officers fraud working group—said that it would create uncertainty in the law. I can see their point. For example, how many of the minor defects of a second-hand car would a seller be trusted to disclose? The Government listened with care to those concerns and responded by restricting the offence to legal duties only—a position supported by the Rose committee, comprising members of the senior judiciary set up to ensure that legislative proposals are as well formulated as possible and can work in practice.

John Bercow: The incidence of credit card fraud, not merely by customers against retailers but often the other way around, is a significant problem, of which I confess I was briefly the victim in South Africa last year. Will the hon. and learned Gentleman tell the House something about the penalties proposed in the clauses and specifically how they compare with existing penalties? Is he prepared, alongside custodial sentences, to consider stiff community penalties and possibly the use of restorative justice?

Mike O'Brien: We certainly need to look at the full range of penalties. Crime involving fraud, particularly cheque card fraud and other credit card fraud, varies in terms of extent. It can be a massive fraud that merits a high penalty. Indeed, the maximum penalty under the Bill is 10 years' imprisonment. A community penalty and restorative justice may be appropriate if the amount involved were limited, the defendant had a limited record, or none at all. In those circumstances, we could look at various forms of restorative justice, particularly if the defendant were younger. I think that it is about achieving proportionality and ensuring that the appropriate sentence is delivered for the offence that was committed.
	The third limb of the offence—fraud by abuse of position—is set out in clause 4. Here, the additional element is abusing a position of responsibility to commit a fraud. It applies in situations where the defendant has been put in a privileged position and by virtue of that position is expected to safeguard another's financial interests, or at least not to act against those interests.

Dominic Grieve: I understand the thrust of the clause, to which we will obviously have to return in Committee, but is there not a possible problem with the lack of definition involved in a person's occupying a position in which he is "expected to safeguard" somebody else's interests? That is a much wider term than "a duty to safeguard" such interests.

Mike O'Brien: We need to ensure that we have a view about how a relationship is created. It can be created in various ways, such as by contract, through various relationships or by a legal obligation. It is clear that, as long as there is a basis for ensuring that a person has a fiduciary duty to another person, there is the potential for such a charge to be made. But in prosecuting any such case, it will of course be necessary for the prosecutor to ensure that he identifies the way in which the circumstances had developed, and whether a fiduciary duty had indeed existed. It will then be up to him to show that that is what happened.

Dominic Grieve: The Solicitor-General has used the precise expression "a fiduciary duty", which would already provide a definition that appears currently to be absent from clause 4. In saying that, I emphasise that he might be able to persuade me during our proceedings that the current wording is better; I simply wish to register that this issue causes me some concern.

Mike O'Brien: Of course, the duty may well go beyond a mere fiduciary one; other duties could be encompassed. We can deal with such detail in Committee.

David Heath: I wish to make exactly the same point. I am unclear as to why the expression
	"he is expected to safeguard"
	should replace a clear reference to a fiduciary duty. The question that all Members wish to ask is: who is the "he" who is expected to provide the safeguard? Is it the man on the Clapham omnibus, or the judge; or will the terms of contract provide the safeguard? What does the expression "expected to safeguard" mean? We will clearly need to explore that issue in Committee, but if the Solicitor-General can help us to understand it now, that would be to the advantage of us all.

Mike O'Brien: The Law Commission cogently set out its views on how this relationship should be formed. In each prosecution, it will be necessary to assess the particular circumstances and whether there is a duty, in that a person is expected to safeguard, or not to act against, the financial interests of another. It will be for the prosecutor to show that that relationship existed, and, in due course, for the court and the jury—if it is a jury trial—to determine whether such a relationship existed.

Chris Bryant: Might that include the position of a friend? For instance, if I am selling something to a friend of mine who happens to know that its value is far higher than the price that I am selling it to him for, will he be required in law to reveal to me the full value, and will he be guilty of fraud if he fails to do so?

Mike O'Brien: I do not think that that would arise under this limb of the offence, but it would depend on the circumstances and the relationship between the friends. If they are dealing as equals, it would be a straightforward contractual relationship. Under this limb, for there to be an abuse of position, it is required that a particular duty is owed by the individual, over and above that which people have when they enter into a normal contract to purchase property, or anything else.

John Bercow: I note the characteristically cautious reply that the Solicitor-General gave to the hon. Member for Rhondda (Chris Bryant), but is it not the case that the far more likely reaction of his friend would simply be to think that he has undervalued one of his own possessions? That is such a spectacularly implausible scenario as to merit no further discussion.

Mike O'Brien: In fact, my hon. Friend should perhaps look at clause 3 rather than clause 4, because the former covers fraud by failing to disclose information. That probably covers the issue better than clause 4.

Dominic Grieve: The nature of the Bill probably means that the detail is the most important aspect, but it is true that clauses 3 and 4 overlap. It is possible for one single action to be an offence under clause 3, which is reasonably happily drafted, and under clause 4, about which I have much greater concerns.

Mike O'Brien: There is some overlap and I say again that it would depend on the circumstances between the two friends undertaking the financial deal that my hon. Friend the Member for Rhondda (Chris Bryant) described.
	Fraud by abuse of position improves upon the current law, because it may be problematic under the current law to show that a victim has been deceived in circumstances where the defendant occupies a position of trust. In proposing the new offence, the Law Commission recommended that it should be an offence of fraud only if the abuse of position is both dishonest and secret. However, again after considering the arguments put forward during the consultation in 2004, the Government decided not make secrecy an essential part of the offence. We took that view because secrecy is difficult to define and would represent an unnecessary complication, which could lead to technical arguments in court. Moreover, conduct that is not secret is not any the less reprehensible and thus should come within the ambit of clause 4.
	The Fraud Bill also creates some offences designed to complement the new general offence.

Keith Vaz: My hon. Friend will know that on 1 June EU Ministers met and agreed a formula for sharing evidence between EU countries on matters such as fraud. Does he agree that that decision, along with the decision to implement the European arrest warrant, which came into effect in 2004, will help us on cross-border issues, so that no one who commits a fraud in another EU country should believe that that will necessarily prevent them from being brought to justice here?

Mike O'Brien: It is certainly right that some of the developments in the global economy that have so benefited our economy have also benefited a lot of fraudsters, who operate in Europe and globally. We now see frauds committed by a group on one continent against victims on another, especially by use of the internet. We are now developing relationships between the various prosecutors and Governments to build up new mechanisms, such as the one that my hon. Friend described, that will enable law enforcement agencies to keep abreast of the changes that the global economy is bringing. I hope that those mechanisms will enable us to get ahead of the fraudsters. My hon. Friend is not only well informed but right about the importance of developments in the EU, especially the European arrest warrants.
	Some of the other changes in the Bill were recommended by the Law Commission, but others were not. Clause 11 was recommended by the commission and creates a new offence of "obtaining services dishonestly". It is probably the most important other provision in the Bill, and the offence will have a maximum penalty of five years on indictment. It will replace section 1 of the Theft Act 1978 and will fill a gap in the existing law. At present, it is questionable what crime is committed by a person who dishonestly obtains services from a machine. Under current law, the problem is not only that fraud must involve deception, but that services cannot be stolen.

Jeremy Wright: The Solicitor-General mentioned that the maximum sentence for the offence would be five years, which is a restatement of the current law. Did the Government give any consideration to increasing the maximum sentence for the offence to make it comparable with the sentence for obtaining property by deception, or with the offences that replace that offence?

Mike O'Brien: We are responding to the broader consultation that took place and the work done by the Law Commission. On the face of it, the penalties that we have set out in the Bill look to be appropriate in all the circumstances. Consideration is always given to whether penalties are adequate, and we took the view that in all the circumstances they were adequate in this case. It is always possible to increase sentences, but it is necessary to look at the circumstances that the offence would contain and to determine the appropriate maximum penalty, in the knowledge that the maximum penalty is rarely imposed. None the less, the provision gives the court an indication of the relative seriousness with which Parliament regards various offences. We have taken the view that five years on indictment is the appropriate maximum, but in due course we can consider in Committee whether a higher sentence is more appropriate, and I shall be happy to discuss that point with the hon. Gentleman then.
	As I indicated, the problem under current law is that fraud must involve deception but that services cannot be stolen, so the new offence of obtaining services dishonestly is a "theft-like" offence and will, for example, deal with a person who gains access to a Sky machine, or television, with an illegal decoder. It would also cover longer-standing misbehaviour such as gaining access to football matches without paying, so it moves from the more substantial to the not necessarily more substantial.

David Heath: I do not want the Solicitor-General to expand his examples too widely, but would the provision also apply to downloading music? Would it put a new weapon into the hands of large music corporations for protecting their intellectual property—as they would see it?

Mike O'Brien: It may. Such corporations could use other provisions, but often the real problem in the area that the hon. Gentleman mentions is not so much with the law but with the practicalities. Some of those items are downloaded from countries a long way away, so whatever our law, it is sometimes difficult for people, artists or companies to protect their copyright. That has been a long-term issue, and is better dealt with not so much through the criminal law, which is obviously related to a particular jurisdiction, but through international agreements. When I had ministerial responsibility for dealing with issues relating to internet fraud, I helped to negotiate agreements with Japan and a number of other countries so that we could begin to make the international agreements that would provide a basis for trying to protect some of the copyrights and international artistic licences that need protection. The provision could be used, but the jurisdictional problem is greater than the legal one.

Edward Garnier: How will clause 11 create a better set of circumstances than the offence of obtaining pecuniary advantage under the old law? How will it produce a better set of circumstances than the provisions of the Theft Act 1978?

Mike O'Brien: The provisions to which the hon. and learned Gentleman referred had some limitations, which we believe that the broader offence will be able to ensure are covered. There have been quite a lot of changes in technology and in the way in which people commit frauds. The previous legislation had constraints. The proposed provisions are designed to ensure that we can deal with some of the modern phenomena that are causing problems, various frauds and the dishonest obtaining of services. They will ensure that the legislation covers those issues in a broader and more effective way than the previous legislation did.
	That is why the Law Commission came forward with the proposal. If the hon. and learned Gentleman reads the report—I am sure that he has done so—he will be aware that the Commission argues that the provisions set out in the current legislation need to be updated. The Government have endorsed that view. When we went out to consultation, the proposal was warmly welcomed by all who commented on that consultation in 2004.
	Clause 6 did not form part of the Law Commission's report, but was developed through consultation with law enforcers and other key stakeholders who were concerned about the restricted scope of the existing law as regards the possession of articles preparatory to committing acts of fraud. The clause therefore introduces a new offence of possessing articles for use in, or in connection with, the commission or the facilitation of a fraud. It draws on the current offence in section 25 of the Theft Act 1968. Under that section an offence is committed when a person has with him, when not in his place of abode, any article for use in the course of, or in connection with, any burglary, theft or cheat.
	The requirement that a person be outside his place of abode when going equipped may have worked in 1968, but in the modern world, with computers, fraud may be perpetrated by a person sitting at his computer terminal in his home. The offence should not be limited to possession outside the home.

Elfyn Llwyd: Some commentators have referred to the fact that there is an absence of any mens rea element in this part of the Bill. The Solicitor-General has already referred to the "going equipped" part of the provision. I am concerned that a person could be in possession of an article that was for use in the course or in connection with a fraud, without knowing that that article would be for use in connection with the fraud. That is dangerous. Although I understand the reasoning for updating the law, which is very important, I think that it would have been preferable to put in the Bill a clear mens rea element.

Mike O'Brien: As it needs to be shown that there was an intention that an article would be used for any involvement where someone was going equipped in connection with any burglary, theft or cheat, there is a requirement for some degree of intention. There is a mens rea, and case law shows that.

Dominic Grieve: I suggest that the problem may go further, particularly with regard to clause 7. If one were a member of the Magic Circle, with all the impedimenta for deceiving people, and one were going through the streets or even in one's own home, one might frequently be making an article that could be used or adapted in a connection with fraud. I suspect that that is one of the reasons why the original cheating provisions were so tightly drawn. That is something else that we may be able to examine during the passage of the Bill. I am sure that it is not the Government's intention to make it impossible for conjurors to perform their trade.

Mike O'Brien: Let me reassure conjurors throughout the land that, provided that they are not intending to get involved in burglary, theft or cheats or anything else of a similar nature, they should be all right. Let them continue with their tricks.
	The aim of the Bill is to ensure that we get particular individuals who are seeking to go equipped, and may be equipped in their home, and to ensure that—

Jeremy Wright: Will the Solicitor-General give way?

Mike O'Brien: If the hon. Gentleman will let me complete my thought, perhaps I will. It is the intention that we should be able to catch those who are involved in something that is, properly, prosecuted. It is also the intention that there should be a maximum custodial sentence of five years, and that no tricks should be able to get someone out of choky.

Jeremy Wright: May I bring the Solicitor-General back to the point made by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) about the possibility of someone being in possession of an item defined in clause 6(1), but not knowingly? Would the Solicitor-General be amenable to returning to that matter in Committee? The simple addition of the word "knowingly" in that subsection would deal with the point.

Mike O'Brien: May I make it clear that clause 6 does not go too wide, in my view? It does not introduce a strict liability offence in any way. Its wording draws on the wording of section 25 of the 1968 Act in order to attract the case law that goes with that section—notably the case of Ellames, which is referred to in the explanatory notes and which established that the prosecution have to prove a general intention that the article will be used by the possessor, or by someone else, for a fraudulent purpose. We are not dealing with a strict liability offence for which members of the Magic Circle or ordinary honest citizens are going to be caught.

Elfyn Llwyd: There is a distinction. Under the present law of going equipped, if a person were out at night with a jemmy and various other tools, as an initial starting point it would be fairly obvious from the nature of those tools that he was up to no good. The distinction is that an article that could be used in connection with fraud might look perfectly innocent to a person such as me, who is not high-tech, or whatever the word is. Without knowing it, I could have something on my computer that might be used in connection with fraud. If I walked down the street with a jemmy, clearly that would be a different thing altogether.

Mike O'Brien: Again, the hon. Gentleman seems to suggest that this is a strict liability offence, but it is not. If he were in possession of something that he ought not to be, but did not know and did not have any intention, he would be able to put forward a defence. That is right and proper. Nobody intends to catch people who are not acting inappropriately or in a way that goes outside the provisions set out in the case of Ellames. No doubt this is the sort of issue that we can discuss at some length in Committee. Having given way fairly generously, and being aware of the time that has elapsed, I would now like to try to make some progress on the rest of the Bill.
	Clause 7 introduces a higher-level offence of making and supplying articles for use in fraud. This aims to catch groups who create articles for use in what may be very substantial frauds. For example, there are organised criminals who do not engage in actual frauds themselves but who sell lists of personal financial and banking details for others to misuse. The maximum custodial sentence of 10 years serves as a strong deterrent to criminals who prosper from an industry based on fraud.
	Clause 9 implements a recommendation made by the Law Commission in 2002 in a separate report on multiple offending. The commission recommended that, as the existing offence of fraudulent trading under companies legislation applies only to companies, it should be "extended to non-corporate traders"—for example partnerships, sole traders, trusts or companies incorporated abroad. Fraudulent trading is an activity offence, and carries procedural and evidential advantages because it is not limited to specific fraudulent transactions. The proposal was widely welcomed in the Government's consultation of 2004. The new clause 9 offence, together with section 458 of the Companies Act 1985, will carry a maximum sentence of 10 years.
	Let me now turn to the one area of the Law Commission's proposals that elicited opposition when the Government consulted stakeholders. The Law Commission proposed the repeal of the common law offence of conspiracy to defraud. Opposition to that proposal has come not only from law enforcers and the judiciary, through the senior judges on the Rose committee, but from many others, including the Fraud Advisory Panel, the Confederation of British Industry and the Law Society. The Government took account of those considerable objections, so the Bill does not include that repeal, although we will review the position three years after its implementation. We accepted the arguments for the retention for the time being of the common law offence, based on the need to provide a seamless transition between the current situation, in which there is heavy reliance on the offence, to compensate for defects in the statutory law, and the stage when its abolition can be safely contemplated.
	The common law offence of "conspiracy to defraud" is flexible. It is of use in frauds that involve a number of conspirators and hundreds of offences. If each item were charged, the indictment would be lengthy and extremely complex. Conspiracy to defraud allows a charge that covers the agreement to carry out the crime. There are limitations, too, on the application of statutory conspiracy, and the common law offence can be used in situations where statutory conspiracy cannot be used—for example, when the final offence is carried out by someone outside the conspiracy. Overall, the new offences go a long way towards filling many gaps in the law. However, we are concerned about a number of issues, and we should ensure that the common law offence of conspiracy to defraud remains in place, at least for the meantime.
	The Law Commission will shortly publish a report on assisting and encouraging crime. Any reform of the law on conspiracy to defraud or of other laws that flows from that work should be taken into account. We intend to consider the report, all the circumstances and the way in which conspiracy to defraud has been used, then make a decision, which will be informed by our operational experience, not only from the Bill once it is in force, but from the multiple offending provisions in the Domestic Violence, Crime and Victims Act 2004. Those provisions enable multiple offenders to be brought to justice for the totality of their offending. They have not yet been implemented, but we hope to bring them in later this year, making it possible for the courts to deal appropriately with fraudsters who are responsible for scams involving hundreds of victims. The Home Office will review the operation of the Bill three years after its implementation, and it will focus on conspiracy to defraud. We have put in hand measures to collect the information for the review from all Crown prosecutors so that we have a clearer picture of the way in which the common law is used after the new law is implemented.
	I met the staff of the Serious Fraud Office this morning, when I made the same point. I want them to look at the ways in which they use conspiracy to defraud to ensure that it is used appropriately, and to set out their reasons for using it in particular cases so that we can make a more effective assessment in three years' time. That will provide information on which to base a decision about whether the common law offence can be repealed. In the meantime, the Attorney-General's guidance to prosecutors on the use of the common law offence will prove instrumental. It will state what information must be collected from the outset to inform the review, as well as setting out the circumstances in which the use of the common law might, or might not, be justified.

Nick Hurd: The Bill intends to make fraud law easier to understand. In that spirit, can the Solicitor-General define exactly which areas the common law offence of conspiracy to defraud will cover that are not covered by the new offences in the Bill?

Mike O'Brien: The conspiracy to defraud has proved useful to prosecutors in several ways. For example, it can be used to reduce the number of charges that would otherwise be brought. It can be used, too, if the substantive offences are steps to achieve a wider dishonest objective, such as swindling a large number of people. It should not be used where, for example, statutory conspiracy is more appropriate. There are circumstances in which the conspiracy has involved certain individuals who carried out the steps preparatory to the offence, but the substantive offence was committed by somebody outside the circle involved in the conspiracy. There are a number of examples where prosecutors have been able to prosecute people who clearly had a dishonest intent and who were clearly carrying out acts preparatory to a fraud, but who were not involved in the final substantive act. Such cases are extremely useful to the prosecutors.
	We hope that the Bill will cover many areas of fraud. However, since even Ministers do not claim infallibility, we cannot be sure that we can create a set of legal provisions encompassing all the areas currently covered by conspiracy to defraud. We therefore need to await the outcome of events and see how the Bill operates in practice. If we do not need conspiracy to defraud to capture those who are committing serious frauds, our preference would be to repeal that provision in due course. But if we still find a series of examples in which we need to use conspiracy to defraud, we will have to consider whether we can repeal the provision, or whether we should consider alternative tightening provisions.
	The Theft Act 1968 was relatively good. In 1968 it was regarded as innovative—in plain words we would be able to encompass all the circumstances of theft. In practice, it has had to be amended on at least two occasions, and has been the cause of much stress, as the world has changed. We will review the operation of the Bill and see whether a repeal is possible.

Emily Thornberry: Does my hon. and learned Friend agree that when people are charged with criminal offences, it is important to make it as clear as possible in the charge what the offence is? One of the difficulties with the common law offence of conspiracy to defraud is that it is too general a provision. We should always try to ensure that offences are as particularised as possible. That is why the common law offence ought to be repealed as soon as possible.

Mike O'Brien: If we can repeal the offence, our preference would be to do so, but we want to ensure that we deal with the issues of fraud, so that is not appropriate at present. The prosecuting authorities and the judges took the view that we need to approach the matter with caution. The Rose committee, whose opinion is highly valued, did not consider it appropriate to repeal the offence at this stage. In principle, though, I have sympathy with the point raised by my hon. Friend.
	The Bill will not be a panacea for preventing fraud. We should not overrate the capacity of the criminal law alone to solve this or any other problem. The Bill is only one of a number of measures in hand to combat fraud. Among those measures, we have provided considerable resources for the Serious Fraud Office and the City of London police to tackle fraud, including £1.08 million this year, which has been matched by the City of London. That has gone to the City of London police. We have also set up the Serious Organised Crime Agency, which is a new force in tackling and defeating serious organised crime.
	The Government plan to introduce a stand-alone Bill to address the issue of non-jury trials. We have also set up a wide-ranging review of fraud to examine the UK's long-term response to fraud. The fraud review should report shortly, and we expect it to recommend a coherent strategy for preventing, detecting and penalising fraud, and to suggest ways to improve upon the use of the various tools and techniques at our disposal to reduce the incidence of fraud and the harm to which it can lead.
	This Bill is largely based on the Law Commission's original proposals, and it is only part of the Government's strategy for combating fraud, but it is a measure that has been eagerly awaited by many of the agencies that prosecute, and by the police. It should improve the prosecution process by reducing the chance of offences being wrongly charged, and provide greater flexibility to keep pace with the increasing use of technology in crimes of fraud.
	When hon. Members consider the Bill in Committee and on Report, I hope that they give it a fair wind, so that it can proceed into law and be enforced, which will reduce some of the fraud that is all too often committed against families in this country.

Dominic Grieve: I congratulate the Solicitor-General on having secured that rarest of things for a Law Officer—an outing at the Dispatch Box on Second Reading. I note that the interest of the House has not been wholly seized by this matter, but the Bill is extremely important and I am grateful for the manner in which he introduced it. Furthermore, it is clear that the Bill was well thought through before its initial presentation and I make my remarks against that background.
	The Bill is an opportunity to simplify and strengthen the law in an important area. If we get it right, we will undoubtedly improve our ability to fight fraud in all its forms, and we wholly support the principle behind what the Government are trying to achieve. As with all technical Bills, this Bill has quite a long history. There is no doubt that the Law Commission's 2002 report was a document of great value. I would not want Second Reading to pass without expressing the Opposition's gratitude for the Law Commission's work, because the report was a model of its kind. I note that the Serious Fraud Office was extremely positive about the commission's proposals, stating that the suggested improvements would not only clarify offences of fraud, but simplify the law to allow more effective prosecutions, and I am sure that all hon. Members want to see exactly that.
	I agree with the Solicitor-General that, although fraud sometimes sounds like an esoteric issue that affects others, that is not the case. The scale of the problem is considerable—his estimate of £14 billion appears well researched—and everyone pays for it through extra credit card payments, if nothing else, so the burden falls upon the law-abiding, who provide the fruit of such dishonest activities.
	Fraud is extensively used to fuel wider criminal activity. The evidence from the National Criminal Intelligence Service shows that, unless we succeed in tackling fraud properly, there will be knock-on consequences in terms of wider criminality and, indeed, terrorism. In my career as a barrister, one fraud case that I did involved allegations of widespread benefit fraud that was being used to fuel the activities of the IRA. The fraud was taking place on a massive scale in south-east London with stolen benefit books and the case brought home to me how the eventual destination of such funds can be inimical to the public good.
	There are clearly problems with the current law, which originates from a variety of sources, and I accept the Solicitor-General's comments on that matter. The Theft Act 1968 attempted to simplify matters on obtaining property by deception, but the patchwork of law is unsatisfactory and the multitude of overlapping but distinct statutory offences does not make it easy for the prosecutor to decide the counts on which to draft an indictment, whether there should be alternative counts and how best to present a case to a jury.
	In my experience of being involved in fraud trials, an astonishing number have come unstuck in one form or another, long before they could be presented to a jury, simply because the prosecutor—I hasten to add that I was defending in these particular cases—had failed to understand the true nature of the fraud or, indeed, who the ultimate victims were. Although the evidence of dishonesty was manifest, it was impossible to show that the people who were alleged to have been deceived had been deceived. In some cases, the wrong target altogether had been selected. In a case where it looked as though a building society had been the true victim, it became clear as the case proceeded that the true victim was almost certainly the taxman. Those examples classically illustrate some of the problems that arise.
	In those circumstances, there is a powerful argument for reform. The Bill sets out to achieve that in a form that seems to have considerable internal logic and coherence. The creation of a new single offence of fraud that can be committed in three ways appears to be eminently sensible. We will judge it and scrutinise it in Committee on the basis that it fulfils three requirements. First, it must overcome the complexity of the current law and make it more comprehensible to juries. One way of achieving that would be to make fraud indictments simpler and more self-explanatory. At first glance, the Bill seems to go a long way towards achieving that goal.
	Secondly, the new offence must provide a genuinely useful tool for prosecutors. My Front-Bench colleagues in the other place have said that the current range of specific offences can lead to complicated decisions, so we will need assurances as the Bill goes through that a single offence will really help to focus investigations at an early stage and help prosecutors to get the charge right.
	Thirdly, we will need to be satisfied—we believe at first sight that we shall be—that the new offence will be adaptable to the changing face of criminality in the 21st century. The Solicitor-General pointed out areas where new offences have been created to deal with new technology. We entirely welcome that. We will seek in Committee to ensure that it delivers what he believes that it will.
	Let me, at the risk of repetition, raise one or two slight areas of concern. The Solicitor-General mentioned the continuation of the common law offence of conspiracy to defraud. He provided some reassurance in the form of a promise that the Government will not just let that issue drift off into sleep. I would be happier if we had greater reassurance, perhaps by means of a sunset clause to ensure that, unless the Government revisited the matter within three or five years, the power to bring a prosecution under common law for conspiracy to defraud would lapse. The arguments against keeping the common law offence of conspiracy to defraud are enormous. Throughout my career at the Bar, there have been numerous occasions on which that offence has come into disrepute when used. It is possible for a person to be convicted of such an offence if he conspired with another person, yet if he carried out the act on his own, it would not amount to an offence. That immediately introduces an element of concern for anybody who believes in civil liberties. Although I am mindful of the Solicitor-General's comments on the subject and appreciate that Governments have a tendency to caution, I am sorry that they have not been bolder, especially since the Law Commission stated emphatically that it perceived no good ground for the continuation of the common law offence of conspiracy to defraud. Indeed, the Government's report of November 2004 acknowledged that when it stated:
	"It is normally fundamental to a codification exercise such as this, that the common law should be repealed in favour of the new statute".
	It is strange that the Government have clung so obstinately to not doing that.
	I am mindful of the Solicitor-General's comments on the views of Lord Justice Rose and his Committee, but against that, the hon. and learned Gentleman need only read the speeches of Lord Lloyd and Lord Ackner—his contributions on many aspects of the law and, indeed, to legislating in Parliament, will be sadly missed—who argue that there is no good ground for retaining the common law offence. I hope that the Government will listen during our proceedings on the Bill. I shall not press the Solicitor-General to get rid of the offence immediately, but we need cast-iron reassurances that, unless the Government can make a good case for retaining it, we can have a finite date by which it will go.

Mike O'Brien: The hon. Gentleman referred to the Rose Committee. Let me refer him to the letter from Sir Christopher Rose, representing the views of senior judges. It stated:
	"We said that it would be risky to repeal common law conspiracy to defraud, as it can be the most effective charge in a case where multiple defendants are engaged in a fraudulent course of conduct. There are limitations on the law of statutory conspiracy, which has had something of a chequered history. All the judges present at the meeting agreed the Bill should not repeal common law conspiracy to defraud."
	That is not an example of the Government deciding not to do something but of the Government listening. We have listened to the consultation.

Dominic Grieve: I, too, have listened to the consultation. If I had not been listening, I—and, I daresay, my noble Friends—would be pressing for the removal of the common law power. I want to make it clear that I do not seek to do that because I have read what has been said. Distinguished as the group may be that has called for the retention of the powers, I remain mildly unconvinced.
	I hope that the Bill is sufficiently effective that it becomes crystal clear in two to three years that the common law offence of conspiracy to defraud is no longer necessary. The other option that one might consider if the offence remains necessary is whether that hole could be filled by something else, which does not have some of the problems that are associated with common law conspiracy to defraud that the Solicitor-General heard me discussing. He would, I am sure, be the first to acknowledge them. There may be a halfway house that we need to consider and that we have not yet explored.
	Conservative Members will not try to amend the Bill to get rid of common law conspiracy to defraud. However, knowing as we do the constraints on Government of timetabling and so on, we do not want the opportunity to slip through our fingers so that we end up with the offence in 10, 15 or 20 years. I believe that there might be some way of at least ensuring that the matter is properly revisited so that either the offence's retention is justified or it disappears.

David Heath: It concerns me that arguments for the retention of the common law offence in prosecuting multiple offences are affected by the fact that provisions in the Domestic Violence, Crime and Victims Act 2004, which the hon. Gentleman and I spent time debating, have not been implemented two years on. That might have coloured the judicial voices in favour of retention in a way that would have been unjustified had implementation occurred.

Dominic Grieve: The hon. Gentleman makes a good point. Indeed, one problem, given the plethora of legislation that the Government introduce, is the astonishing length of time that it takes to bring into operation much of the legislation that we pass. I do not wish to get diverted down a side road, but I would say to the Solicitor-General that we will try at least to probe the Government in Committee as to how we might best proceed in this regard. I would feel uncomfortable if we were really saying that it was inevitable that such a blunt instrument as common law conspiracy to defraud should continue to be an offence for the foreseeable future. If that turned out to be necessary, we would have failed to legislate properly here. Minds need to be concentrated on that issue.
	I would like to express my gratitude to the Government, because I had feared that there might be a major difference between us over the role of juries in fraud trials, but that issue has been parked to await other legislation. May I say to the Solicitor-General that the sensible thing to do would be to wait and see how well this legislation works? If it turns out greatly to have simplified the law on fraud, no more powerful an argument could be devised for persuading the Government to drop their idea of getting rid of juries in certain fraud trials in its entirety.
	I have always taken the view that juries are perfectly capable of understanding fraud trials. Indeed, as I have pointed out to the Solicitor-General, in my experience, the cases that collapsed did so long before the jury had the opportunity to consider the issues. I remain concerned about the proposals on juries in fraud trials that the Government had floated, and that will doubtless be a subject for debate at another time. The Government appear to wish to move speedily towards implementing their proposals to restrict the use of juries in certain fraud trials, but it would be odd if they did so immediately after implementing new legislation that could go far towards reassuring them that fraud trials can be considerably simplified.
	In interventions on the Solicitor-General, I raised some matters of detail that gave rise for concern. We shall doubtless return to them in Committee, but I want to put them on the record today. Fraud by abuse of position is a concept that most right-thinking people have no difficulty in considering improper. However, the definition in the Bill of the position in which such fraud is committed is woolly. I am worried that we have developed a consistent pattern in recent years of passing legislation whose scope is uncertain in criminal justice terms. People behave reprehensibly at times in ways that other people would consider to be of poor moral standing. The hon. Member for Rhondda (Chris Bryant) gave the good example of a friend not revealing to another the true worth of some chattel that he was selling off to a third party—or to the friend himself—when he knew that it was in fact very valuable. However, we should be careful about moving from a position of deeming such activity morally reprehensible to saying that it is in breach of the criminal law.
	Clause 4 deals with fraud by abuse of position. However, unless we define exactly who is intended to be caught by the provision, quite a wide range of people—including relatives, for example—could fall into that category. I want effective legislation on the statute book and I believe that it is possible to sharpen this measure to make it clear who is intended to be caught by it. If we do not improve clause 4, the danger is that we will end up bringing prosecutions in circumstances in which people are surprised to learn that some special duty lies on them to protect another person from making a loss.
	I also highlighted the issues surrounding the making or supplying of articles for use in frauds and was delighted to hear the Solicitor-General comment that the provisions were not intended to catch conjurors or members of the magic circle, but I have to say that, looking at the plain text of the statute, such people might well be caught. The use of gadgetry that can potentially be used to defraud in order to entertain is a well-established practice, so I wonder what other safeguards could be provided to ensure sufficient mens rea in clauses 6 and 7 to avoid idiotic prosecutions of individuals who never had any intention of defrauding anyone. We shall look further into the detail of those clauses in Committee, as we will examine further the general issue in clause 2 of what constitutes gain or loss.
	I do not want to take up more of the House's time on Second Reading. As I have already told the Solicitor-General, we welcome the Bill.

Nick Hurd: Before my hon. Friend finishes, what comfort did he take from the Solicitor-General's assurances about the police resources available to screen and investigate these offences in the first place?

Dominic Grieve: I took little comfort from the Solicitor-General's words on that subject.

Mike O'Brien: Are you going to spend more money?

Dominic Grieve: The Solicitor-General makes a perfectly reasonable point that it all comes down to money and there is no doubt that resources for the investigation of fraud are limited. My hon. Friend may have seen the Norwich Union briefing, which showed that it uncovers thousands of fraud cases in any 12-month period, but that only a very small percentage of the total are even passed on to the police because of the company's awareness of the lack of police resources.
	Certainly in my experience—and it is one of the reasons why the Serious Fraud Office was set up—many a prosecution in the late 1980s and early 1990s was investigated by officers of county constabularies who, although well meaning, were often out of their depth when it came to dealing with the elements of fraud. That often coloured the way in which the prosecution was conducted. By the time the prosecutor, and certainly barristers, got involved, it was evident that the whole case was completely on the wrong track. There were real problems.
	We may have an opportunity to debate in Committee the extent to which the Serious Fraud Office has been able to take a grip on the matter, but it is worth remembering that many frauds that concern individuals do not fall within the Serious Fraud Office's remit. They are simple straightforward frauds, but they nevertheless have sufficient complexity to merit having officers—certainly police officers and, in my view, members of the Crown Prosecution Service—working on them who have an understanding of the concepts and pitfalls. My hon. Friend the Member for Ruislip-Northwood (Mr. Hurd) made a fair point, but there are resource implications, so to that extent, I am sympathetic to the Solicitor-General and the problems that he faces.

Mike O'Brien: Certainly, the fraud review led by the Attorney-General will examine some of those issues, particularly how the police have dealt with fraud—mainly lower-level frauds that do not fall within the ambit of the Serious Fraud Office. I hope that, as a result of that review, we will see some improvements in the policing of fraud. Without wishing to widen our debate too much, I believe that the larger police forces will allow greater specialisation so that chief constables can identify the experts to focus on fraud cases. That should help to ensure that police forces have the level of expertise that the hon. Gentleman wants. Having larger forces will help.

Dominic Grieve: I am not wholly convinced by the Solicitor-General's arguments on the last point, especially, of course, as one of the most effective police forces in dealing with fraud is the City of London police, which is rather a small force. My hon. Friend the Member for Ruislip-Northwood (Mr. Hurd) may agree from personal experience not only that it deals with fraud rather effectively, but that its general policing is pretty effective at every conceivable level. I am afraid that that is where the Solicitor-General and I part company.

Mike O'Brien: The City of London police are expert at dealing with fraud, but we have given them more than £1 million extra to ensure that they are, and the City gives them even more. That costs extra resources. If he wants to replicate the specialism of the City of London police across the country, I would be interested to see his commitment to doing so.

Dominic Grieve: Our commitment is to tackle crime at every level and as was clear at the last election, to do so, we were prepared to invest in the police force—indeed, to a greater degree than the Government were prepared to do themselves.

David Taylor: Is the hon. Gentleman unimpressed, as I am, by the Solicitor-General's specific contribution in saying that we have given £1 million to the City to improve the capacity to investigate fraud? Should not those costs fall entirely on the City of London? Why should the general taxpayer be required to provide money in that way?

Dominic Grieve: At the risk of straying mildly but not too far away from this issue, if the City of London was allowed to raise and keep its own rate precept of both business and domestic rates entirely to itself, so that none of it was sent to any other part of the country, including the hon. Gentleman's constituency, I am sure that it would not ask the Government for a ha'penny. In those circumstances, he might go away and usefully review the statistics on what happens to the City's money, which it raises both from the business community and from its domestic residents.
	I look forward to engaging with the Solicitor-General in the debates in Committee for sensible scrutiny of the Bill. In its framework, it appears well judged. We will try to ensure that, when it leaves the House, it is improved in any area where that is required.

Brian Jenkins: I speak in support of the Bill today. It looks to be a good Bill—one that has had a very long gestation period, which reflects its complexity, rather than its size. It is one of the better Bills for me, as it is rather slim. It is a credit to all concerned in the consultation on and the production of the Bill that it has been drafted so concisely. The accompanying explanatory notes are well laid out and a great help to people like myself, a non-lawyer, in understanding the logic behind the Bill.
	Fraud is not a victimless crime; it is an insidious, indiscriminate crime that wreaks long-term damage on UK business, not only in cash terms but in undermining confidence in the institutions that are needed to trade and create wealth. It hits the pockets of individuals and creates misery for many families. It costs the people of our country dear, and I should like to extend the figure that my hon. and learned Friend the Solicitor-General put on that: it is now approaching £20 billion a year. It is a large business, and its proceeds keep organised crime funded. It also funds terrorist organisations—the very groups that are pledged to bring down our way of life. So I welcome this approach to tackling those problems, but I remind my hon. and learned Friend that the Bill is only part of the solution: we cannot will the end without providing the means.
	Let me talk about the enforcement of the Bill and, if I have time, about the responsibility of financial institutions in their struggle against fraud. Who do we envisage investigating alleged fraud? Will we ensure that all investigating police officers tasked with applying the law will be trained to understand it, able to contend with modern technology or have access to specialist support? Will they be properly supported by Crown Prosecution Service lawyers?
	Will judges be trained and maintained as specialists in fraud cases, to retain and reinforce expert knowledge and skill within the law? One cannot imagine going into hospital for a knee operation, or for neurosurgery, and being told that a heart surgeon will do the operation. It is ridiculous that a judge who has presided competently over a fraud trial might never oversee another fraud trial in his career. Society cannot afford such a waste of resources.
	With regard to the financial institutions, it is no longer acceptable, if it ever were, for companies to pay out on claims without making thorough checks on their legitimacy, and merely to recoup their losses by passing on the costs to all policyholders through increased premiums. The scale of the problem was highlighted by Norwich Union, which, in 2004, identified and prevented 15,000 insurance frauds. It estimated that 4,000 would have met the criminal level of burden of proof. Because it did not want to over-burden the police, it submitted just 41 of the most serious cases, in which there were possible links to organised crime and the evidence was overwhelmingly persuasive. Of those, 27 were taken up by the police, and 18 came to court and resulted in conviction. I applaud Norwich Union's attempt to tackle fraud, but until every organisation, bank and insurance company takes the same stand against organised crime and fraud, the costs of which are met through extra bank charges and premiums, it will not be tackled seriously.
	Do the police have the resources to process all such cases? Do we seriously intend to use—I look to the Solicitor-General to give an answer—the Proceeds of Crime Act 2002, and to channel funds to the police for this activity, so that it becomes self-funded? Does he have any other ideas about finding resources?
	Speaking not as a lawyer, but as the man on the Clapham omnibus, let me examine the plain English guide in the explanatory notes. The Law Commission recommended that the conspiracy to defraud charge should be abolished, but then had concerns that limitations on scope meant that certain types of secondary participation and fraud might still only be caught by the common law charge. Will my hon. and learned Friend give some examples? I listened closely to what he said, but he knows that there is still concern. Alternatively, will he say that the Government do not know exactly what the situation might be but that it would be prudent to leave the provision in place, as a belt and braces approach, while they reassess the legislation as they intend to do?
	If the Solicitor-General has no specific time scale in mind, does he have in mind a number of cases on which case law can be built up? Until such time, will he not throw out the legislation but reinforce it with a belt and braces approach? This is the man on the Clapham omnibus speaking, not the lawyer, as the general public will not take it kindly if we throw out old legislation and replace it with new legislation that contains a loophole.
	As I look through the explanatory notes, I see in relation to fraud by false representation that there is no legal definition of dishonesty. That is a surprise to me and will come as a surprise to people outside. What we have is a tortuous two-stage test as established in the case of R  v. Ghosh in 1982. The first question is whether the defendant's behaviour would be regarded as dishonest by the ordinary standards of reasonable and honest people. If that is answered in the affirmative, the second question must be whether the defendant was aware that his conduct was dishonest and would be regarded as dishonest by reasonable and honest people. That is a tough test, and it is becoming tougher by the week. It is certainly becoming tougher for those who do not come from the same culture and background as others in this country. What constitutes "honest" and "dishonest", and what is reasonable and honest behaviour, without a definition of dishonesty?
	Paragraph 16 of our "Everyman's Guide", the explanatory notes, refers to "phishing" for internet details. My hon. and learned Friend spoke of ties with Japan and other countries, but are we going to extend the provision to America? An internet bank could be established in America and the proceeds could go to Belize, and when the bank folded it could be found that no crime had been committed because no section of jurisprudence covered the total area. Will my hon. and learned Friend work closely with his colleagues to try to close the loophole generated by internet sites based overseas?
	Clause 3 is headed
	"Fraud by failing to disclose information".
	When I read that, I thought "Here we go". I must say that it is a very brave idea. It may have escaped others' attention that we now live in a capitalist society. Capitalists make profit, if not through sheer exploitation of individuals through labour, then through exploitation of knowledge, skills and money. That is a legal activity; it only becomes illegal when dishonesty makes it a criminal fraud. But as I have said, dishonesty is a rather nebulous concept in law because there is no firm definition, only cases in relation to which definitions can be established. Until we can establish firmly what constitutes dishonesty, the pursuit of wealth and gain through exploitation of knowledge and skills in a capitalist society must remain legal. That is one of the problems with which we shall have to struggle on for a bit longer.
	Clause 4, entitled
	"Fraud by abuse of position",
	causes me a few more worries. I am not talking about family membership; I am talking about a much more difficult problem. I am not talking about insurance salesmen, who must declare to their clients what commission they are being paid, what the risks are and so forth. I am not even talking about building societies that try to sell endowment mortgages: people must be well aware of those risks as well. Insurance salesmen and those selling endowment mortgages are paid for their services and can be regulated, but I am not sure whether my hon. and learned Friend has thought about this: what happens when a company's directors are in a position of power, influence and authority, and decide that although they are already well paid, they will shovel bucketloads—shedloads—of money into their own pension fund, while the pension fund of the workers for whom they are responsible becomes a black hole? They may say, "We will put X per cent. into our pension fund and X per cent. into our employees' pension fund", but when they shovel money into their own pension fund, will they be guilty of fraud by abuse of position at any time in the future? If so, I—the man on the Clapham omnibus—would very much like to sit on the jury, especially if it affects my pension fund.
	I think that the Standing Committee should start hammering out—unless my hon. and learned Friend can give us an answer today—whether that would be covered by the Bill, and if not, why not.
	The explanatory notes tell us:
	"The term 'abuse' is not limited by a definition",
	because it covers
	"a wide range of conduct."
	Clause 4, they say,
	"makes clear that the offence can be committed by an omission as well as by positive action."
	I have some difficulty with that as well.
	"For example, an employee who fails to take up the chance of a crucial contract in order that an associate or rival company can take it up instead at the expense of the employer"
	will commit an offence. If the employee is conspiring with the rival, fair enough. If it is a malicious act against the employer, fair enough. However, the employee may be plain stupid. Are we going to start charging people for fraud because of their stupidity? Proof must be provided that not only the company but the person involved made a gain.
	My friendly notes say that the definition of property includes intellectual property, "although in practice intellectual property is rarely 'gained' or 'lost'."
	It must be understood that, although the information and knowledge may not be gained or lost, the holder's equity in that intellectual property can be seriously weakened once that has been leaked into the market. I therefore wish that we would move away from the view that intellectual property cannot be gained or lost.
	We have talked about making or supplying articles for use in fraud. I understand that one or two Members are a bit concerned about the software that is loaded on their computers, and rightly so. Software may come with a package and all that stuff. The notes refer to programmes that "can be used" for fraud. Someone will be capable of being charged with having in their possession something that can be used for fraud. For an offence to be committed under the Bill, it should be made clear that the article has been used for fraud or is intended to be used for fraud—one must see that something has been downloaded or used in that manner, rather than someone just being in possession of something that can be used for fraud.
	Clause 11 deals with obtaining services dishonestly. Again, this is a cracker. We have to understand the wording in law with regard to people in general. The notes say that it is an offence dishonestly
	"to obtain services for which payment is required, within intent to avoid payment."
	I can see someone going to the court and saying, "M'lud, the trouble is that it says here 'with intent to avoid payment'. I had no intent to avoid payment. I just had no cash. I intend to pay it when I have money. I will put my name down and put a paper or slip in." When we look at these Bills, can we make sure that it is clear that, if people do not have the money to pay, they may still intend to pay?
	Later we have another classic one: the decoder example. I am sure that the Minister is fully aware of all the packages that are available on the internet now for terrestrial and other channels. If he is fully aware of all the channels that are paid for and the ones that are not paid for, can he give me an indication, because I am not?
	The package in my house comes through cable. We get channels that we should normally pay for but that we do not pay for because it is all-in: television, telephone and everything else. We pay once a month, so they are paid-for channels. If I get a freeview box and put it on top of the television, I cannot get the paid-for channels through the freeview box. However, if they attach the channels as part of a package, they come with the freeview box.
	Imagine the nephew of some person on a council estate walking in and saying, "Auntie, you have not got a freeview box. I can supply one to you. I have a mate who has a freeview box." Very good. He puts it in and it is £50 for the box. She does not know that she can get a box for £30. In it goes, and the card goes in. She is sitting happily watching the television. She has her freeview box on top of the television. There is a knock at the door and someone says, "You are viewing channels you are not supposed to view." She will say, "I did not know that. If I go to the market, I can see freeview boxes every week. What makes this one different?"
	The BBC is chasing up people using televisions without a licence. So why should we chase up people who watch Sky movies or any other such product? Why is Sky not chasing them up? I can understand why it is a criminal offence to make such a decoder box, and why, if such information comes to us and we find these people out, we should chase them up. But I am not sure why we should do so simply to help Mr. Murdoch make a few more million pounds.
	I turn finally to the Visiting Forces Act 1952. Under the Bill, any member of the visiting forces cannot be charged because all such offences will be regarded as offences against property. Why? I recognise that visiting forces from certain parts of the world might want to have some independence of local legislation, but no serviceman of a force coming to Britain should be able to stand aside from the 1952 Act. Visiting servicemen will be able to supply such articles in this country without being tried, unless their commanding officer decides to try them.
	With those few caveats, I welcome the Bill. I hope that we will fund and resource it properly, and that we will show the people of this country that we are serious about such crime, which is not a victimless crime. It causes great distress to many families, especially when people have their identities or passports pinched, or their bank cards are fraudulently made and the bank continues to issue cards in their name, even after they have told it to stop doing so. In the meantime, it bears no risk because it can pass the charges on. If someone introduced a Bill seeking compensation from financial institutions that pass on, by increasing premiums, such costs to the people on whom they impose their incompetence, I would back that as well. That said, I wish this Bill well.

David Heath: I join in the general welcome for the Bill and for the way in which the Solicitor-General and the hon. Member for Beaconsfield (Mr. Grieve) opened the debate. There is a general view that the Law Commission has done an extremely good job in addressing issues relating to the prosecution of fraud, and a general realisation that we should take fraud a great deal more seriously than we have perhaps sometimes done. Indeed, there is much frustration at the fact not only that high-profile serious fraud cases have often appeared to founder, but that low-level fraud is frequently not prosecuted at all—at the fact that it is somehow regarded as a lesser offence than others that are, perhaps, committed by people not wearing white collars and ties at the time. I do not accept that view; fraud is a serious crime that should be prosecuted with as much assiduity as any other offence.
	Three factors are involved in the general approach to achieving successful prosecutions. The first is the law, which we are addressing today by simplifying the law relating to the relevant offences; the second is the prosecuting and investigating authorities; and the third is the management of court cases.
	I have long had a serious concern about the disjunction between the various prosecuting authorities. I know that it is fashionable to criticise the Serious Fraud Office and, to a certain extent, the prosecuting department of Her Majesty's Revenue and Customs, but the real problem lies in the lack of resources available across the field, and in the fact that, too often, we have different compartments. Some deal with fraud against Government, and others deal with serious fraud. There is the Serious Organised Crime Agency, which is in its infancy and deals with organised crime; and the City of London police, which does a wonderful job—within the City of London. Beyond that, there is very inadequate provision across the territorial forces of this country. I know from my own experience in policing that there simply is not the expertise in most provincial forces effectively to investigate and to provide the wherewithal for successful prosecution of fraud.

Mike O'Brien: The City of London police are responsible not only for fraud in the City, but more widely for London and the south-east, hence the extra resources that they receive. They have built up enormous expertise and I endorse the hon. Gentleman's comments about the way in which they carry out their duties. We are all very grateful to them.

David Heath: I concur, and, as one of the rare breed of council tax payers in the City of London, I am glad that it is not solely my contribution that enables them to do their job on behalf of the wider community. I have thought for a long time that we need a single, all-embracing anti-fraud organisation, with much better internal connections, to provide better investigations in parts of the country that are not currently well served. I hope that that will form part of the conclusions of the review that the Solicitor-General mentioned.
	Even when we have successful investigations, we still have problems with the management of fraud cases. The over-simplistic view sometimes expressed on behalf of the Government that that is somehow the result of juries who cannot cope with the amount of information and the time scale of cases is unsupported by evidence. We must be clear about that. If we want an instructive case study, we need look only at the Enron trial in Houston. It was the fraud case of the century—a huge case, with huge ramifications. It did not lack for evidence, because it took evidence from 56 witnesses, but those responsible managed to conclude the trial in 15 weeks. The jury had nearly six days of deliberation and found the defendants guilty as charged. If that is possible before a Texas jury and a Texas judge, it is not beyond the wit of UK juries and UK judges to effect similar management. In contrast, the BCCI litigation—although it was a misfeasance trial, not a fraud trial—took more than two years, and cost more than £100 million in legal bills. The two opening speeches alone took 200 days of court time, only for the action to be abandoned, with all that work proving abortive. That is an effective comparison of the effectiveness of trial procedures and the Lord Chancellor—as he is at the moment—the Attorney-General and the Solicitor-General need to consider the issue carefully to see how we can make improvements.
	Like the hon. Member for Beaconsfield, I hope that we will hear no more of the implementation of section 43 of the Criminal Justice Act 2003. I think that we have had an assurance from the Attorney-General that if the Government take the view that they need to restrict jury trial further—which I would oppose with every fibre of my being—he will do so by means of new primary legislation. If that is the case, he will no doubt support the amendment that I intend to table in the course of proceedings on the Bill to repeal that section as entirely otiose. We shall then have proof of the Government's intentions.
	I shall mention several issues that I hope to address further in Committee. We had a short debate on clause 4, which states:
	"A person is in breach of this section if he...occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person".
	I was not entirely persuaded by what the Solicitor-General said about that provision. He seemed to be saying that he actually means "the person occupies a position in which he has a duty"—wording that seems entirely appropriate. However, the wording "he is expected to" opens the provision to all sorts of challenge, which is entirely unnecessary because there is no suggestion that there is an additional general duty on an individual citizen. I think that is what the hon. and learned Gentleman said, so it is something that we could usefully consider in Committee.

Mike O'Brien: I have looked through my notes for the exact quote from the Law Commission about clause 4, which I shall read out as the hon. Gentleman has expressed concern about the issue. It states that the "necessary relationship" of a position of trust
	"will be present between trustee and beneficiary, director and company, professional person and client, agent and principal, employee and employer, or between partners. It may arise otherwise, for example within a family, or in the context of voluntary work, or in any context where the parties are not at arm's length. In nearly all cases where it arises, it will be recognised by the civil law as importing fiduciary duties, and any relationship that is so recognised will suffice".
	But—and this is important—it states:
	"We see no reason, however, why the existence of such duties should be essential."
	In other words, the Law Commission has set out the type of relationships in which a position of trust might arise.

David Heath: I hear what the Solicitor-General says, but I still do not entirely understand the point. I do not want to detain Second Reading by trying to reach that comprehension, so perhaps we can explore it in Committee. All those cases suggested a duty that could be expressed in those terms, so the idea that there may be some other context in which a court could be persuaded that a person had a reasonable expectation of that duty without it comprising a duty seems a very nice point, of which I would need some persuasion before embracing it.
	Clause 5 gives definitions of gain and loss and, again, we can usefully explore those points in Committee. Subsection (3) notes:
	"'Gain' includes a gain by keeping what one has".
	So how would the law apply, for instance, in the case of overpayment of a sum of money that one has received in good faith, such as a child tax credit? Again, that is something that we can explore at a later stage.
	On clause 6, the point has already been raised about mens rea in the case of possession of an article and we heard warm words in support of conjurors, who will be able to go about their legal business, using their paraphernalia without fear of arrest. I am not absolutely sure that that is what the Bill says, although I accept the assurances of the Solicitor-General. At what point does a conjuring trick become a dishonest act? The three-card trick seems to be the turning point at which a conjuring trick starts to become a confidence trick. I shall be interested to know how the definition will work in such cases. The Solicitor-General was at pains to say that it would not be an absolute offence, but there is at least an intimation that it is, because the Bill does not specify a statutory defence.
	I am less worried about conjurors, however, and more worried about unwitting agents of fraudsters. There are many examples of a person carrying forged credentials—forged documents or letterheads—believing that they are acting lawfully and appropriately for an enterprise when in fact they are not. It worries me that they might unwittingly find themselves in possession of an article that was being used and had been produced for the purpose of fraud, but which they were not aware was being used or had been produced for the purpose of fraud. We need to be clear about the defence that could be used in those circumstances.
	We do not want to create a defence that is too easily used by someone who is probably guilty of an offence but who wishes to use their ignorance as a means of avoiding prosecution. We must also be careful to ensure that innocent people are not found guilty of an offence when they are genuinely ignorant of the purpose to which the article in their possession could be used.

Mike O'Brien: As I indicated earlier, it is not a strict liability offence. It is the responsibility of the prosecution to show that the individual had an article in his possession with an intention that it should be used in some fraud. That is not on the face of the Bill, but the provisions import the case law of Elan from the previous legislation. That is clear. I say it with all the authority that a Minister has on presenting a Bill. It is intended that the provision should import previous case law.

David Heath: That is extremely helpful. It is clearly not on the face of the Bill. I do not think that we can assume, but the Minister has gone a long way to helping us to assume in a way that the courts will recognise. I am grateful to him for that.
	I welcome the new provisions for fraudulent business carried on by sole traders. An area that I would like to explore in Committee and perhaps at later stages is where actions are taken in anticipation of receivership or bankruptcy. I perceive that there are many instances where people carry out actions that have the long-term effect of defrauding creditors or employees of a company in the expectation of a company ceasing to trade or in anticipation of that happening. My belief is that that is fraudulent. My belief also is that there can be a deliberate intention to remove assets from a company prior to it ceasing to trade, in a way that is intended to prevent genuine creditors, including the employees of the company, from getting their proper recompense. That is not adequately covered, and is certainly not adequately prosecuted at present. I would wish to explore that.
	We have already dealt with clause 11, which is the replacement of part of the Theft Act 1968. I made an intervention about downloading. I do not defend those who illegally download music. Equally, there have been occasions when large corporations have been extremely heavy-handed in either threatening to or carrying out legal action, particularly against minors who have perhaps unwittingly committed an offence. If the clause can be used to launch a private prosecution of a 12-year-old with a computer who is downloading songs off the internet, with mum and dad having no idea that that is happening, that worries me. Perhaps we shall receive some reassurance about that at a later stage.
	We need a slightly more specific definition of the related offences on non-incrimination. Under clause 13 there is a requirement that a person is not to be excused from answering questions on matters relating to an offence under the Bill or a related offence. We need to know what the related offences are, rather than have an open-ended commitment at that point.
	Lastly, in terms of what is in the Bill, there is the extent. I know that there has been an issue about whether we should assume extraterritorial jurisdiction in the Bill. The Government have broadly decided that they should not do so. However, the extent to which extraterritorial jurisdiction is appropriate in relation to some of the offences is still an open question. Certainly, internet crime is a real issue, as the Solicitor-General well knows. There is also an issue with unsolicited mail—something that bedevils an awful lot of our constituents. Often it originates from abroad and constitutes what I would consider a fraud on the recipient. When someone receives what purports to be a demand for money, which may have a fraudulent intent, we shall need to be careful about the point at which that becomes prosecutable and in what jurisdiction.
	May I conclude with what is not in the Bill? The major issue, of course, is the fact that the Bill does not repeal the common law offence of conspiracy to defraud. The hon. Member for Beaconsfield said that the Law Commission was fairly explicit. It could not have been more explicit. Its report refers to
	"the indefensible anomaly represented by the continuing survival of conspiracy to defraud".
	It is an indefensible anomaly that the Solicitor-General now finds himself in a position to defend. I am not convinced by the arguments. They are based on the existing law of fraud, rather than the law as it will be following the Bill's enactment, and the existing law on multiple offences, rather than the position that will be the case after the rather belated implementation of provisions on multiple offences in the Domestic Violence, Crime and Victims Act 2004
	The offence is a catch-all offence, which, if there are adequate alternatives, I find repellent in itself. The offence provides an easy route for dual criminality, which is becoming more and more of an issue in extradition proceedings, given that almost anything that is a lawful activity on behalf of one or more people might be interpreted as a conspiracy to defraud and might therefore provide that dual criminality to enable extradition. We need to look at this matter again, both in Committee and probably on Report. In the interim, I ask the Solicitor-General seriously to consider why it would not be appropriate to have a repeal provision in the Bill with a later commencement date or a commitment involving, in effect, a sunset clause for that particular provision, which could be reversed by Order in Council. There are ways of providing the primary legislative framework for the repeal of the existing offence, which we can do by virtue of the Bill and still have the precautionary approach that the Solicitor-General advises. The advice to prosecuting authorities needs to be extremely robust when it comes to why they should not use the conspiracy to defraud. I would like a commitment from the Solicitor-General, if he can give it, that he would be prepared to use noli prosequi powers to prevent a prosecution on that basis if he believes that there are other more appropriate offences as a result of the Bill that should be used as an alternative.
	There are other matters that could have been placed to advantage in the Bill. We do not have that many Bills working in this broad area. I would have liked the Bill to be not just the Fraud Bill, but the fraud and corruption Bill. It is a perfect Bill for the incorporation of the provisions of the Corruption Bill that is before the House in the name of the hon. Member for City of York (Hugh Bayley). Many people feel that that is an essential part of our armoury against corruption on a wider scale and fulfils the expectations on this country by treaty to provide better anti-corruption legislation. It is consistent to join fraud and corruption, as there is a considerable overlap between the two, and the Bill is an appropriate vehicle to do so.
	Some things that could be construed as fraud or corruption are not investigated or prosecuted. It is perhaps over-fashionable to talk about association football, but it is inappropriate for bung allegations to be investigated by the Football Association and other sporting bodies. They should, at least on a prima facie basis, be investigated by the police and other investigating authorities, and I am surprised that no such investigation has taken place on the basis of the evidence that has been made public.
	Finally, does the Solicitor-General think that anything could be included in the Bill so we can deal more effectively with carousel fraud, which has become an extraordinarily serious issue? A report on figures recently released by the Office for National Statistics in the past few days says:
	"Criminal gangs are cheating the taxman out of VAT on £1 in every £7 of Britain's trade with Europe."
	That is a staggering figure—14 per cent. of all Britain's imports and exports are subject to carousel fraud, yet we have been unsuccessful in achieving effective prosecutions and indictments. If we can do anything to make such fraud easier to investigate, to bring charges and to secure convictions, we should use the Bill to do so, as it is an appropriate legislative vehicle. I invite the Solicitor-General to consider whether that is possible.
	On the whole, this is a good Bill. We wish to explore some issues in Committee and on Report, but we certainly support its passage and hope to improve it along the way.

Jeremy Wright: May I begin by declaring an interest as a non-practising barrister? Like every speaker in our debate, I welcome the Bill, which is a good measure that deals effectively with an unnecessarily complex area of the criminal law.
	As has been said, there can be no doubt that fraud is a serious business. The criminal law is required to deal with it effectively, and we do not want to construct laws that allow criminals to find loopholes. The Solicitor-General has made it clear that that is the purpose of the Bill, which I welcome wholeheartedly. I particularly welcome the fact that it deals with the fraudster's intentions, rather than the consequences of fraud. Instead of dealing with deception and the question of who is deceived, which causes the problems that we have discussed, it addresses the fraudster's intentions and whether or not they are dishonest. That is an extremely effective riposte to the fact that, as fraud is increasingly perpetrated electronically, there is no one to be deceived.
	I wish to make three points about the Bill against the background of my broad welcome. First, I echo the remarks of my hon. Friend the Member for Beaconsfield (Mr. Grieve) about jury trials. This is a good Bill, because it makes the law of fraud simpler, thus weakening considerably what, in my view, is an already weak argument for a reduction of the right to jury trial for individuals accused of fraud. In my experience juries are well able to deal with the matters put before them in a fraud trial, so long as the lawyers putting those matters before them do so in a straightforward way. The Bill will help them do that, which means that juries will be more, not less, able to deal with fraud trials. I recognise that, as the Solicitor-General said, these arguments are for the time when we deal with another piece of legislation, but I hope that he will not do something counter-intuitive, by passing one piece of legislation that helps juries, and then not taking that into account when he considers whether juries are able to deal with fraud trials.
	The second issue that I want to raise also follows on from comments by the Solicitor-General with which I wholeheartedly agree. It should not be up to the criminal law alone to deal with fraud. It is up to the Government to consider the other ways in which they can reduce the likely incidence of fraud. Fraud prospers in complex systems. It is much easier to perpetrate a fraud in a system that is difficult to follow, because that makes it difficult for those who enforce the rules to work out how the rules have been flouted, and difficult for a court and a jury to work out how the system has been abused.
	I urge the Government to examine the systems for which they have responsibility and ensure that they are as simple as they can be. We have seen recently that in the tax credit system, the internet portal has become subject to precisely the type of fraud that the Bill is designed to address. The Government need to review not only the criminal law but the systems in place in the benefits system and the tax credits system, and ensure that where simplicity is possible, it is introduced, so as to play its part in defeating the potential fraudster.
	Thirdly, I return to my earlier intervention and press the point about the maximum sentence in clause 11. The clause deals with obtaining services dishonestly. I welcome the fact that it redrafts the law so that dishonesty, rather than the deception of an individual, is the key question, but it is a restatement of the law with regard to maximum sentences. The Bill offers an opportunity, which is well taken by the Government, to simplify the whole area and make it straightforward, consistent and easy for the general public to understand so that everyone knows what they are obliged to do and what they are not permitted to do, but there is a potential anomaly in the law as it stands with regard to maximum sentences.
	Under the Bill, if someone were to perpetrate a dishonest act by representation or by omission or in other ways, leading to a gain or loss of money or property, they would face a potential sentence of 10 years. If, however, they obtained services by dishonesty, they would face a maximum sentence of only five years. There must be circumstances, as we can all envisage, in which the value of services is at least as high as the value of property, which is encompassed by the earlier clauses.
	If, for example, one defrauds a merchant bank of property or money to a high value, one faces a potential sentence of 10 years. If, on the other hand, one defrauds a merchant bank in such a way that one receives the services of a very highly paid, professional and experienced merchant banker, which might be worth as much as or perhaps more than the property of which the bank could have been defrauded, one faces half the potential maximum sentence.
	I accept that, as the Solicitor-General says, not every case results in the maximum sentence, but we could take the opportunity in the Bill to send a message that dishonest acts leading to the defrauding of an individual or a company are all potentially very serious. Whether people are defrauding them of services or of property, the maximum penalty available should be consistent across the board. The Government could take the opportunity to establish that in the Bill, and would be well advised to do so. I hope that we will be able to return to the matter in Committee, and I invite the Government to think carefully about it.
	Broadly speaking, I welcome the Bill. It is a good Bill, and it is generally well targeted. However, it could be better, and I hope that at the conclusion of its passage through the House, it will be.

Chris Bryant: I apologise for having missed the speech by the hon. Member for Somerton and Frome (Mr. Heath), although when I asked him whether he had said anything that I would not have expected him to say, he said no, so I did not miss very much.
	In recent years, it seems to have become a law of Parliament that the significance of a piece of legislation to ordinary people's lives is inversely proportional to the number of hon. Members in the Chamber. This Bill is very important for our constituents, not least because the law on fraud has been a hotch-potch until now, with different bits and pieces of legislation being knitted together to cover what many would consider to be an important offence.
	Since the introduction of the Theft Act 1968 and its subsequent amendments, the nature of fraud has changed dramatically. The hon. Member for Rugby and Kenilworth (Jeremy Wright) has referred to the fact that much fraud is now conducted electronically, which is a specific issue for those trying to secure successful prosecutions. The law must keep up with technology, which it has failed to do in that area in recent years.
	I know from my constituency surgeries and from letters from my constituents that a significant number of people are affected by identity fraud, the theft of credit card details and other scams. Such scams often involve relatively small sums of money, so people do not necessarily go to the police, who may find such matters too complicated to proceed with. I suspect that a large amount of fraud is barely considered by the criminal justice system, because people shrug their shoulders and say, "Ah well".
	In welcoming the Bill, I want to press the Solicitor-General on implementation and enforcement. He has referred to the Crown Prosecution Service, the Serious Fraud Office and additional funds for the police, particularly in central London. Around the country, however, police forces sometimes feel incapable of dealing with the complexity of the IT, of the fraud itself or of the law, and I hope that training will take place in all the police forces in the United Kingdom to make sure that everybody has equal access to justice.
	Fraud is more than a national matter. Frauds that have been brought to my attention through my constituency casework include the Spanish lottery fraud, which is well known and has been well attested on television. In order to pursue justice in such cases, one needs a degree of Europe-wide intervention. Similarly, I am sure that all hon. Members have received e-mails from people across the continent of Africa offering them large amounts of money to set up some kind of business. Again, none of us ever refers those e-mails on to any part of the legal system—yet perhaps we should, because others who are perhaps less cynical and sceptical than us fall into those traps.
	All hon. Members who have spoken have discussed whether we should abolish the common-law offence of conspiracy to defraud. I agree with the Government that fraud cases can be amazingly complex and that statutory conspiracy law may not suffice. In most major credit card fraud cases, one person does the phishing by sending out e-mails—again, I am sure that all hon. Members have received such e-mails—that make it look as if one's bank has managed to lose one's details and is asking for them to be restated.
	Another person may use a "Trojan horse"—the practice of sending random e-mails that attach themselves to the recipient's internet explorer and manage to inveigle them into visiting a website that they would not otherwise have visited, so that in the process, or in trying to extricate themselves from the website, they end up inadvertently giving further details about themselves. Such a fraudster may be separate from the first type.
	Then, if money is to be taken out of the United Kingdom, a money mule will be required. The entire process of complex credit card fraud can involve a series of different people, each of whom is committing a fraud, but one does not get the full sense of the criminality that has been engaged in without seeing the whole package of the fraud. Indeed, individual members of the gang may not know that the others are engaged in it. In those circumstances, I understand that there may be reasons why we should want to keep the common law offence of conspiracy to defraud.
	Moreover, the fact that, as the British Retail Consortium points out, many new forms of fraud are coming online as a result of new internet IT may mean that we would want to keep a stop-gap clause of some kind. However, as other hon. Members have said, some more hotly than others, it is pretty difficult to advance the argument that we should keep stop-gap legislation just in case we need it. Despite the comments of the Solicitor-General, the law says that an act committed by an individual is not an offence against the criminal law, whereas it may be an offence when it is committed by two people. That puts us in danger of bringing the law into disrepute. I realise that the Solicitor-General has moved considerably further on this issue than the Attorney-General did in the House of Lords, but I would welcome a clear indication that if we do not feel that the common law provision is still necessary, we will see a specific end date.
	I question whether 10 years is a sufficient sentence. Some of this fraud is very significant. It does not always involve one person being defrauded out of a small amount of money; sometimes millions of pounds is defrauded from lots of people.
	I also question, as did the hon. Member for Somerton and Frome, whether aspects of corruption should be included in the Bill. I note in particular that we have not revised for many years the legislation on the suborning of a police officer. There is some debate about precisely what that offence now is. However, many newspapers acknowledge that they pay police officers for information that would otherwise be secret and private, and should probably remain so, so that the police can perform their legitimate duties as regards a secure prosecution. Perhaps by now the Government should be advancing legislation to reform the law on suborning a police officer.
	I think that what the shadow Solicitor-General said about magicians and the Magic Circle was wholly erroneous. It is clear that under clause 6, which deals with carrying articles for use in connection with a fraud, the fraud would have to involve the person making a gain for himself or another, causing loss to another, or exposing another to a risk of loss. I cannot see why magicians would be caught by that in any sense. The clause that they are most likely to be caught by is clause 2, which covers fraud by false representation, but they would probably not be dishonestly making a false representation, but honestly making a false representation.

Elfyn Llwyd: I am trying to follow the last point, which was interesting, to say the least—a rabbit out of a hat.
	The debate is important and the Bill is interesting. As hon. Members of all parties have said, it is welcome, but, as with every measure, aspects need addressing in Committee. I agree with hon. Members who spoke in favour of preserving the right to jury trial. I speak as a practising barrister and not, I hasten to add, out of self-interest. Jury trial is and always has been the bulwark of justice and it should be retained at all costs.
	The Solicitor-General, who was generous in allowing interventions and has taken the debate forward through his responses, made the point that the Bill will simplify to some extent the offences involving fraud and lead to shorter indictments. That, in turn, will lead to a simpler process, which will negate the need for denuding people of jury trial.  [Interruption.] I note that the Solicitor-General was with me on the first three points but unfortunately shook his head at the last one.
	All of us who are involved in the criminal justice system—as legislators, practitioners and so on—are bound to try to keep matters simple. That is not to be offensive to juries. When I prosecute, if I do not keep a case simple and it is lost, it is my fault because I have not made the case properly and it therefore should be lost. It does not happen because the jury did not understand it but because the case was not made simply and understandably. It behoves us all to make law that is readily understood by all concerned, including juries.
	The Solicitor-General knows that the Lord Chief Justice recently referred to some protocols, including case management, the involvement of prosecutors at an earlier stage in larger fraud cases, more effective pre-trial hearings, encouraging judges to use their powers to persuade prosecution that charges should not be pursued, severing indictments and so on. If those are proactively pursued, together with the simplification for which the Bill provides to a large extent, a good job of work will be done.
	I do not intend to say much about conspiracy to defraud because others have discussed it at length. Ultimately, there will be no case for retaining that offence, but I have some sympathy with the Solicitor-General, who is effectively saying, "Let's see how the offences bed down and, in three years' time, we might be able to knock it on the head." That is a pragmatic and sensible approach. The hon. Member for Beaconsfield (Mr. Grieve) said that he would like the measure to include a sunset clause. That could amount to the same thing as the Solicitor-General's approach, if we are considering discontinuing the offence in three years. I appreciate that it is not exactly the same, but it could have the same effect. I understand his caution, especially given that several highly regarded senior members of the judiciary on the Rose Committee have said that we should be careful about ditching it now. My opinion therefore varies slightly from that of the hon. Member for Beaconsfield.

Jeremy Hunt: Does the hon. Gentleman agree that the fundamental difference between the course of action that the Solicitor-General proposes and a sunset clause is that the latter does not require further action on the part of the Government for the common law offence to fall whereas the former does?

Elfyn Llwyd: That is self-evident. Surely this place can find time for the presentation of a short Bill, if the political will is there. I do not understand why I am suddenly defending the Government—it is an unusual if not unique position for me to occupy——but the hon. Gentleman is right.

Brian Jenkins: Will the hon. Gentleman give way?

Elfyn Llwyd: Of course I shall give way to the hon. Gentleman from the Clapham omnibus.

Brian Jenkins: Although I should like to agree that it would be appropriate to incorporate a sunset clause, what guarantee could the hon. Gentleman give that sufficient cases had come to trial within the time to be sure that we no longer needed the offence? That is the difficulty. Who can guarantee the number of cases that will come before us in a set time? Surely it would be better to build up a bank of knowledge and ensure that the measure is working before we make the decision.

Elfyn Llwyd: I think that I agree with the hon. Gentleman. A period of three years has been mentioned and that is ample time in which to ascertain whether to get rid of the offence. I stress that I do not violently disagree with the hon. Member for Beaconsfield, who supports a sunset clause. We all want the same thing—it is a question of how we get there.
	I shall be relatively succinct because others wish to speak and we are holding a Second Reading debate, which does not call for going into the minutiae. The hon. Member for Beaconsfield referred to the definition of "gain" and "loss". Some people believe that it is too broad. We shall have to revert to the matter in Committee and I am sure that we will hold an interesting discourse on it.
	I am worried about clause 6. I intervened on the Solicitor-General to point out that it requires no mens rea element and that it should do so. A few moments ago, he responded to the hon. Member for Somerton and Frome (Mr. Heath), who made the same point, by saying that intention will be necessary for a successful prosecution. That poses the question of why "knowing" or "intending" is not included in the provision. If it were, I would not have raised the matter and I am sure that many other learned commentators would not have raised it. Is the Solicitor-General open to an amendment along those lines in Committee? He was adamant that intention was required. In opening the debate, he said that there was some sort of tie-up between the old offence of "going equipped" and the clause. I tried to make the point that they are different because, if a person, late at night, is carrying bolt cutters, jemmies and all the typical gear of a housebreaker, that is one thing, but there is also the high-tech stuff—PINs, cards and so on—that is not perceived as being there specificallyeb;normal;j for a dishonest or nefarious purpose. There is therefore a distinction, which bolsters the case for including some sort of mens rea element—either "knowing" or "intending"—in the provision. It is necessary to have a serious debate about that.

Edward Garnier: Perhaps a better analogy than the offence of "going equipped" is instruments that can be used for an innocent purpose and adapted for a nefarious one, for example an iron bar or knife. It is the old distinction between "made" and "capable of being adapted" for a criminal purpose.

Elfyn Llwyd: The hon. and learned Gentleman gives a better example, albeit along the same lines as mine. I shall come back to this point in due course, and I do not want to labour it this evening. It was important to mention it in passing.
	There is a mental element in clause 7(1)(a), which states that a person is guilty of an offence if he makes, adapts, supplies or offers to supply any article—
	"knowing that it is designed or adapted for use in the course of or in connection with fraud".
	I believe that that approach is preferable. I am not sure why there is a distinction between clauses 6 and 7, in that there is a mental element in the latter but not the former.
	The provision in clause 4 on fraud by abuse of position is overdue. A typical example that we have all come across is the situation in which a carer is less than honest and takes money or goods from the person in his or her charge. Unfortunately, we have all seen cases of that. The old Theft Acts would have covered such circumstances, but this provision creates a specific offence that may well be simpler to prosecute.
	I have some difficulty with the wording of clause 4, particularly with the words
	"position in which he is expected to".
	Those words are vague, and I hope that we can debate them in Committee. The present definition also raises the question of who is expecting the defendant to safeguard another person's financial interests or to avoid acting against them. Is it the person whose interests are concerned? Is it a third party? Or is it a "reasonable person"? If a person unreasonably expects another to safeguard their financial interests, that should not give rise to liability under the clause. Further, if there was no legal duty to do so, and the defendant was not aware that he was expected to do so, he or she should not be liable for this offence. We need clarification and it is the whole point of our proceedings in Committee to discuss such matters in detail.
	The organisation Justice is of the opinion that
	"the offence should only give rise to liability for the intention to cause loss or risk of loss where the person suffering the loss is the same person to whom the duty is owed. It is, in our view, illogical that the mere existence of a duty towards party A may result in liability for an intention to cause loss to party B, who may be completely unrelated to A."
	I do not expect the Minister to respond to these points today, but no doubt we shall be able to engage in a debate on them in due course.
	The Bill is vague about gain or loss, and that also needs to be looked at. I would like to give the Solicitor-General an example. Let us say that A's mother, M, is a kind-hearted old lady, and that A fears that people occasionally take advantage of her kindness. A's friend, B, asks A whether M has any money, as he needs a loan of £5,000. A knows that M has more than that amount in a savings account, but he lies to B, saying that his mother does not have any money at the moment. The morality of A's actions might be open to question, but would there be any criminality involved? [Hon. Members: " Discuss."] Yes, it does sound like a university question, but it is none the less fascinating.

Chris Bryant: Has the hon. Gentleman got A and B the wrong way round?

Elfyn Llwyd: No, I have not, or, if I have, so has Justice.
	Clause 6 deals with the possession of articles. The Solicitor-General has gone considerably further today than was the case in the other place, in saying that there would have to be an intention. He very fairly intervened on the hon. Member for Somerton and Frome on the point. I hope that it will be possible to advance this part of the Bill, to make it clearer and safer.
	Clause 11 deals with obtaining services dishonestly. That new offence is necessary because of the way in which things have moved on since the Theft Acts 1968 and 1978. We are now living in an electronic age and it is important to look with clarity at such offences. We need to consider the words "dishonest act" in clause 11(1)(a). Should there be a specific mens rea requirement in regard to a defendant dishonestly obtaining services in breach of subsection 2? That is undoubtedly what the clause intends, but it could be argued that, under the present wording, such an act would be intrinsically dishonest, so there would be no need for a finding that the person was dishonest. A better interpretation would be to insert a mens rea element to avoid any difficulty.
	The Bill is overdue, and it is welcome. I believe that the House will agree to the Government's proposals in large part. However, caveats have been added by several hon. Members, and I join them in expressing my discomfort about some of the offences that lie between involving strict liability and being an ordinary form of offence. Obviously, we need to ensure that it is absolutely clear that we are setting up legislation that is designed to catch dishonest people. However, it is not utterly clear in some parts of the Bill that that will be the way that it will work. Despite those few misgivings and caveats, I welcome this important Bill. In relation to a remark made earlier by the hon. Member for Rhondda, (Chris Bryant) it has not been standing room only here today, but the Bill is important to all our clients—[Hon. Members: "Clients?"] I meant to say "constituents". The Bill is important for all our constituents, especially those who might be affected by fraud, but also those who might be tempted to perpetrate an act of fraud.
	We in this House think that we always legislate sensibly and that we always get things right. I remind hon. Members that there was a mistake in the Theft Act 1968 as a result of some draftsman forgetting to repeal the provision that a person caught stealing a sheep could be hanged. Let me tell you that, in some parts of Wales, that has caused a great deal of difficulty.

Charles Walker: Thank you for calling me to speak last, Mr. Deputy Speaker. I am the tail-end Charlie in this important debate. Given the closeness of the debate, I feel that I am among old friends. At its best attended point, there were 15 Members in the Chamber, and that included Madam Deputy Speaker. However, it has been a good debate, and it is getting better. Or it was until I stood up. Certain parts of it were fairly sterile, but the hon. Member for Rhondda (Chris Bryant) started to inject the subject of people into it and talked about how fraud impacts on the ordinary people—real people—who come through our surgeries every week.
	To use a well-worn cliché that I have heard on a few occasions this afternoon, fraud is not victimless. It is not some sterile concept. Fraud is theft. It is clear and simple theft, committed by very undesirable people. If I may use unparliamentary language, Mr. Deputy Speaker, fraud is, in the main, committed by absolute toe-rags—nasty, unpleasant, self-interested, self-motivated people.
	It is easy to talk about fraud as something that is large scale—something to do, perhaps, with Asil Nadir and Polly Peck,  The Mirror pension fund or the BCCI scandal of many years ago. By and large, though, fraud is often small scale. As the hon. Member for Rhondda said, it is committed against ordinary people, who might suddenly find £3,000 taken out of their bank account, not only their £1,000 worth of savings but another £2,000 overdraft on top. It is frightening and, once one gets caught up in the fraud web, it is extremely difficult to unravel it. It can take months or years to get one's life back on track.
	Fraudsters tend to be indiscriminate and opportunistic. In my constituency, there is a group of fraudsters who use fake ID to gain entrance to old people's homes. Some come in the guise of police officers, others as council officers or workers for local utility—gas or electricity—companies. That is an obnoxious and obscene form of fraud, an absolute abuse of trust and a misrepresentation of the worst kind. I hope that, when the Bill becomes an Act, it will ensure that people who use fake ID or credentials to gain access to people's homes feel the full force of the law. Ten years may not be long enough.
	I met a local vicar earlier today, a minister of Rosedale church, whose mother had someone on her doorstep claiming to be a police officer and gaining access to her home in that way. She is an extremely clued-up woman. She quickly realised that something was wrong, she led him into a room that happened to be her garage and she locked him in it. It was 8.30 at night, so she thought that the police would not be interested in coming to arrest him and left making the phone call until the following morning. She thought that she would let this young man contemplate the error of his ways in her garage. Unfortunately, when the police turned up the next morning, he had found a way out of the garage. That may sound like an amusing anecdote, but it was only her presence of mind that allowed her to navigate her way out of that unfortunate situation. Many elderly people find their trust being abused and pay a huge cost for it, not only financially, but in their mental well-being.
	As well as people who gain access fraudulently, there are the so-called rogue traders who use fake qualifications to gain people's trust——"I am from the federation of master builders; I know what I am talking about." All of a sudden, the vulnerable find themselves paying out vast sums of money for work that did not need doing to complete crooks who have used fake qualifications to con their way into a position of trust in order to abuse it. Once again, I hope that the Bill will cover those sort of fraudulent acts.
	We must also understand that we have a responsibility and we need to be vigilant against fraud as well. That is the real meaning of responsibility. The hon. Member for Rhondda spoke about phishing schemes in which e-mails are sent claiming to be from the Halifax, advising people that they need to update their bank accounts. People are still falling for that con. I believe that it has been running for three or four years, yet I still find that some of my constituents are falling for it, giving out their financial details and losing vast sums of money in consequence. We, collectively as politicians, the Government, the financial services industry and local authorities need to educate people to be on their guard.
	Why are we still throwing out our bank and credit card statements in the general rubbish, providing a rich source of opportunity? Some of us have bought shredding machines, but then we hear about armies of people sitting in darkened backrooms, putting together what we have shredded so that they can still read our bank account numbers. That is happening— [Interruption.] The hon. Member for Rhondda looks bemused, but I can assure him that this is absolutely the case. In fact, Frank Abagnale, one of the world's top authorities on fraud, visited the country only a couple of weeks ago and said, "For crying out loud, people, don't just get something that shreds vertically. Get a proper criss-cross shredder, so there is absolutely no chance of the information being reconstituted and used to defraud people."

Stewart Jackson: Does my hon. Friend believe that magistrates take a suitably robust approach to the obnoxious practice, prevalent in my constituency and across the country, of distraction burglaries, which are particularly aimed at older people, the most vulnerable in our community?

Charles Walker: My hon. Friend is absolutely right. Nothing upsets the police more than the fact that, when they actually catch an individual who has been preying on the elderly and vulnerable and he is brought before the magistrates courts or even the Crown court, he is given a one or two-year suspended sentence or a bit of community service. That individual then goes back to doing what he was doing very well before—ripping people off. People like that should be locked up and if the Solicitor-General can lock them up not for three or four years but for 10, good on him.

Chris Bryant: The hon. Gentleman is making a case to show how the world of fraud has changed in recent years, but is not the truth of the matter or the real nub the very ancient problem that, as Shakespeare put it:
	"There is no art to find the mind's construction in the face."?

Charles Walker: I must confess that the hon. Gentleman has foxed me with that intervention. Being a man of limited intellect, I was never a great student of Shakespeare, but perhaps we can meet afterwards to talk it through. I am sure that he is talking perfect sense and thank him for that intervention.
	I shall now deal with particular provisions, starting with clause 2, which the hon. Member for Rhondda also spoke about. We have seen the promotion of fraud conducted over computers through e-mail and the internet. The hon. Member for Rhondda and others mentioned phishing, but there are also the K-scams, largely from Nigeria, where people are told that they will receive a large sum of money from a relative of the former deposed king or local warlord who has $55 million to launder. People are asked to send £20,000 so that they can have the whole lot. Unbelievably, people are still falling for it. We have to go with the adage: if it sounds too good to be true, it is too good to be true. In plain and simple, non-Shakespearean English, if it looks too good to be true, ignore it and walk to the other side of the street. How will the Bill deal with international scams, as phishing and K-scams are run from Africa, by and large, or from parts of the former Soviet Union that are not yet in the European Union?
	Clause 3 deals with failure to disclose information. A classic example would be the estate agent who visits an elderly or young person's home and says, "I have looked at your very nice home and you should put it on the market for £165,000." Lo and behold, a buyer turns up the next day and offers to buy it for that sum. The seller is extremely happy and the deal goes through, but he then discovers that the home was really worth £220,000 and that the estate agent undervalued it so that one of his mates could buy it, only to put it straight back on the market with the two splitting the profit. That is a classic example of fraud, which I hope the Bill addresses.
	Clause 4 deals with fraud by abuse of position. Before I entered Parliament, I worked in recruitment businesses and what went on in some of our offices was phenomenal. Nice young men or women would be hired and given a computer at their desk. They would work away, but a year later, we might find out that they were running a completely parallel business from that desk. They might have downloaded all the company's information on its candidates and clients, crossed it over to their computers and run two businesses. If they were caught, they would be fired, but they would often leave with all the data and set up business down the road—another classic example. I congratulate the Government on introducing legislation to deal with that sort of fraud. I am in a very congratulatory mood today.
	One part of the Bill causes me some concern and I am sure that someone will say that I am making a fatuous point about clause 11, which deals with obtaining services dishonestly. It strikes me that the rights to cover test matches at the Oval are owned jointly by Sky and the England and Wales Cricket Board. Fair enough. Will the clause be used against the hundreds of people who like to dangle out of windows or sit on the roofs of the houses around the Oval, watching the cricket? The point is not necessarily fatuous and it is worth raising. People could get a knock on the door from Sky or the England and Wales Cricket Board, who then ask them what they are doing accessing the match. They might say, "You haven't paid to access the match, so please remove yourselves from the windows or roofs."

Chris Bryant: The hon. Gentleman makes a poor point, but a better point is that many people deliberately buy Sky boxes and take them to Spain, France, Germany or Italy, so that they can use UK rights, which they had not bought, to watch in other countries.

Charles Walker: The hon. Gentleman makes a good point. I hope that my point is not as poor as he thinks and that the Minister will respond to it here or in Committee.
	My final concern relates to the decision to retain the offence of conspiracy to defraud. I understand some of the Government's reasons for doing so, but clause 7, on the making or supplying of articles for use in frauds, would cover that, by and large. We have talked about people walking around with crowbars. Of course, it is debateable whether someone is taking a crowbar to lever open a door or to lever off a manhole cover and go about his business if he is a plumber. However, if someone is caught walking around with a cash machine keypad recording device, it is very difficult to argue that that person did not know what it was for; they are specific machinery manufactured only to defraud. I hope that clause 7 will cover a large amount of what is still viewed as conspiracy to defraud, but the Government have a slightly different view.

Stewart Jackson: My hon. Friend referred to Frank Abagnale, one of the world's leading experts on fraud. On counterfeit measures, does my hon. Friend agree that Frank Abagnale has stated that most modern identification cards can be counterfeited at least within 18 months and, possibly, two years?

Charles Walker: My hon. Friend makes a valid point, and to the Solicitor-General's credit, he did not talk about ID cards in his opening remarks. Some people say that ID cards will help to reduce fraud, but many people think that they will worsen the problem. Fraudsters will get hold of ID cards and manufacture them, and they will find them an effective way to win people's trust and take their money. We already see that with passports and there is no reason why it should not apply to ID cards.
	The Solicitor-General said that he was very much in favour of police forces merging, so that they could pool their resources in tackling fraud. May I say for the record that I am totally opposed to the merger of police forces? I believe that most Conservative Members and some Labour Members share that view. Most of my constituents would not buy the argument that one needs to merge police forces to tackle fraud better. Most of them believe that the police are doing a pretty good job and that, when caught, fraudsters need to spend more time in prison and less time on the streets.
	In conclusion, I broadly welcome this Government Bill. I have greatly enjoyed speaking in the debate and the interventions from the hon. Member for Rhondda and my hon. Friend the Member for Peterborough (Mr. Jackson). Thank you very much, Mr. Deputy Speaker.

Edward Garnier: I am delighted that someone such as my hon. Friend the Member for Broxbourne (Mr. Walker) has found this afternoon's debate such an enjoyable occasion, because, as he knows, the Government are here to provide us with pleasure, and they have, in fact, done it 53 times since 1997. This is, I think, the 53rd Bill that they have introduced to do with the criminal justice aspect of criminal policy. Probably, on this 53rd occasion, this is the one Bill that I can more or less wholeheartedly welcome, so long as they implement it.
	I have tabled a number of parliamentary questions to the Home Secretary—this one, the last one and the one before that—to ask which Bills have been brought into force, which of their provisions have been repealed before they came into force, which have been repealed since coming into force and which are yet to come into force, and it is quite amazing how one gets back a telephone bill of an answer, too big to be e-mailed by the relevant Home Office department, to show how active the Government have been in producing legislation, but how dilatory and, indeed, how repetitive they are in the work that they do in bringing it into force. So they are a Government who chase headlines, but thanks to the Law Commission—on behalf of the official Opposition, I send my thanks to the Law Commission—here at least we have a Bill that looks pretty good.
	I also thank the Joint Committee on Human Rights for producing its 14th report, which deals in part with the Bill, and there is some good reading to be had in there, not least because it points out some of the concerns that the Government ought to have—I am sure that the Solicitor-General has them—about aspects of the European convention on human rights and the way in which it bites on the Bill, particularly in relation to articles 5 and 7.
	A number of hon. Members have expressed our interest and support for the continuance of jury trial. My hon. Friend the Member for Beaconsfield (Mr. Grieve) and the hon. Members for Somerton and Frome (Mr. Heath) and for Meirionnydd Nant Conwy (Mr. Llwyd) and others have all expressed views in support of jury trial and quite sensibly stated that the problem with some of the more difficult fraud trials is not the jury's participation but the case management and the way in which the prosecution case has been presented to the jury.
	As my hon. Friend the Member for Beaconsfield pointed out, very often those cases have fallen apart well before they get to a jury. Certainly, if there was much space in the Government's armoury for arguments against the use of juries in fraud trials, that space has been utterly emptied by the production of the Bill, which is, no doubt, intended to simplify and clarify the criminal law in relation to dishonesty. I trust that the Government will be extremely slow to introduce not only another criminal justice Bill, but a Bill to implement section 43 of the Criminal Justice Act 2003, to abolish juries.
	As my hon. Friend and I have said, we broadly welcome the Bill and are prepared to allow the Government the three-year period to consider the aspects of it that have been discussed in the other place and in the House in relation to the common law offence of conspiracy to defraud. However, I remind the Government of what my noble Friend Lord Kingsland reminded the Attorney-General of on 29 March, when the Bill was read for the Third time in the other place. I quote his remarks as recorded in the Lords  Hansard:
	"The Attorney-General has helpfully summarised in paragraph 8 of his draft advice the judgment of the noble and learned Lord, Lord Bingham, the then Lord Chief Justice, in the joined cases R v Rimmington and R v Goldstein. The latter part of the portion of the judgment which appears in paragraph 8 reads,
	'good practice and respect for the primacy of statute do in my judgment require that conduct falling within the terms of a specific statutory provision should be prosecuted under that provision unless there is a good reason for doing otherwise'."—[ Official Report, House of Lords, 29 March 2006; Vol. 680, c. 779.]
	In essence, what other hon. Members and I are asking for is that there should be clarity and certainty in the criminal law. The Solicitor-General and I are familiar with the expression "the certainty of indictment", and that rubric should flow across into statute law, just as much as it does in the drafting of a criminal indictment. Although we are happy to give the Government that three-year extension while they consider the common law conspiracy offence, it is something that ought not just be let to run. Whether there is sunset clause or some other device, it is not something that the Government should allow just to roll off into the long grass.
	What we are essentially talking about is dishonesty—a concept that is often easy to recognise and sometimes a lot more difficult to define. Definitions are important in all statutes, but particularly in criminal law statutes and certainly in the Bill. By and large, the definitions in the Bill are sufficiently clear and the sort of thing that a judge—I declare an interest as a Crown court recorder and as someone who practices as a barrister not at the criminal Bar but at the civil Bar—can easily explain to a jury at the end of a trial.
	We must bear in mind the fact that some areas of definition will need to be teased out. My hon. Friend the Member for Beaconsfield ran through those relating to the expressions "loss" or "gain" in clauses 3 and 5. More importantly, that relating to the word "expected" in clause 4(1)(a) has far-reaching implications that require careful thought. Issues relating to duty flow from that. My hon. Friend and the Solicitor-General had a private debate earlier about fiduciary duty. Speaking as a defamation specialist, when one talks about qualified privilege, one often talks about the duty to pass on a defamatory allegation even though one might know that it is defamatory and might be damaging. That duty can be described as either legal, moral or social. Therefore the fiduciary duty about which my hon. Friend and the Solicitor-General were talking might not be the only sort of duty caught by an expression such as "expected".
	I therefore urge the Government to think carefully in Committee about what they mean, what they want the courts to mean, and what they think the police and prosecuting authorities ought to be doing when faced with a case that might fall under clause 4, entitled "Fraud by abuse of position". As I said, there is a clear need for certainty in the criminal law, and as long as that is provided by the time the Bill leaves this House, either to go back to the other place or to get Royal Assent, none of us should complain.
	I want to say one or two more things about clause 4, as that, in conjunction with the problems described in relation to clauses 6 and 7 on criminal intent, is where most of the difficulty with the Bill will lie. The hon. Member for Meirionnydd Nant Conwy had great fun with his Liberty briefing on A, M and—

Elfyn Llwyd: For the record, it was a Justice briefing.

Edward Garnier: Well, that is J rather than L. They are different letters of the alphabet, and we are making progress. In short, there is a foreseeable potential problem with relationships that can be the subject of abuse, which could then lead to fraud. We must bear in mind the distinction between straightforward dishonest criminal behaviour, which this Bill is designed to catch, and sharp practice, immorality or bad manners, which might be utterly reprehensible as matters of social conduct but which might not fall within the definition of fraud intended by the Government in introducing the Bill. I urge Members who serve on the Committee to invite the Government to think carefully about that.
	There have been seven contributors to the debate, the last of whom, my hon. Friend the Member for Broxbourne, not only clearly enjoyed speaking in the debate but was good enough to tell us that he enjoyed speaking in it, which is a matter of some congratulation. He said that fraud affects not just Members of Parliament or lawyers but our constituents. It is a real issue. As he correctly said, it is not just dealt with on the Enron scale but can affect people with very little by way of assets or money, for whom the consequences can be disproportionately hard. Those with small savings and little wealth can be hard hit by some very nasty people. Now is not the appropriate time to debate the philosophy of sentencing policy. I have some interesting views, at least to me, about the appropriate sentence for all sorts of crimes, but the Bill makes it clear, depending on the clause that one is looking at, that sentences will be 10 or five years. I am sure that Members who serve on the Committee will have ample opportunity to exercise their minds on that.
	My hon. Friend makes the perfectly good point that there is a great deal of self-help that can prevent fraud. Those who throw their bank account details, cheque books or other sensitive information into a bin without shredding them have, to some extent, only themselves to blame, even though those who misuse the confidential information contained in those documents in a criminal way can have no excuse simply because they found it in the bin.
	The hon. Member for Tamworth (Mr. Jenkins) kindly undertook a gentle canter through the explanatory notes to the Bill, which many of us had perhaps not had the chance to read before he read them out to us. That was a valiant service, and I am sure that those on the Treasury Bench have noted that he was able to provide it, for which I thank him very much. He made some other, independent points in relation to the international nature of fraud. Those need to be grasped, especially, as he correctly pointed out, as so much fraud is conducted over the internet. The internet knows no national boundaries, even though the jurisdiction of our criminal courts is to a large extent confined within the boundaries of England and Wales, which I am sure is a point that the Under-Secretary, the hon. Member for Gedling (Mr. Coaker), will want to take back to the Home Office with him, along with the explanatory notes.
	The hon. Member for Somerton and Frome gave a cautious but none the less thoughtful welcome to the Bill. He made some points about the need for a coherent prosecuting and investigatory policy. He invited us to try to manufacture a system with one coherent prosecuting and investigative authority, but he did not go so far as saying that he wanted one amalgamated national police force—

David Heath: Certainly not.

Edward Garnier: The hon. Gentleman says, "Certainly not", from a sedentary position, in case anyone did not hear him. He also made sensible points about case management, and gave his support for the jury system. From my experience of summing up to juries, and of addressing juries as an advocate, they have a collective common sense, by and large, and are exceptionally good at discerning honesty and dishonesty. When considering cases of criminal fraud, one is essentially talking about dishonest behaviour. There is no better way of unravelling all the complicated inter-weavings of a scam and asking whether what was going on was a deliberate piece of dishonesty than to ask a group of 2 people to apply their collective common sense.
	I will not detain the House now with a dissertation on fraudulent preference, on which the hon. Member for Somerton and Frome touched briefly, but there is a story to be told in that regard, as there is with regard to carousel fraud, which has lately hit the headlines. I am sure that the Government have both those matters fully in mind, and I am sure that he can raise them again in Committee.
	One point on which the hon. Member for Somerton and Frome lighted, which others did not, and which is worth highlighting now, is that of evidence on self-incrimination in relation to clause 13. I will have to read clause 13 a few more times before I get my head around it completely, but as I understand it, the self-incrimination concerned relates to questions asked in civil proceedings, which might prevent a prosecutor from using the answers to those questions to mount a criminal prosecution. The Solicitor-General, or my hon. Friend the shadow Attorney-General, will no doubt take me into a cooler room and explain things to me gently.
	I would be interested to hear from the Government, now or subsequently, either orally or in writing, how that clause impacts on what is loosely called the right to silence, or the denial of the right to silence. As the Solicitor-General will know, prosecutors are entitled in certain circumstances, under the Police and Criminal Evidence Act 1984, to comment on a refusal to answer questions or to explain a particular course of conduct, at the roadside, on arrest or later while being interviewed by the police—or, indeed, on a refusal to give evidence in a trial. I should like to know for my own purposes what impact clause 13 will have on that aspect of criminal procedure. As I have said, the Minister need not trouble himself to give me an answer this evening, but I should be grateful if a simple written answer could be prepared.
	My hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) described himself, rather diffidently, as a non-practising barrister, as though he had very little experience of the intricacies of criminal law. On the contrary, he is a highly experienced senior junior at the criminal bar. It is a pity that he has had to give that up for his parliamentary duties from the point of view of the courts in England and Wales, but it is a great benefit to the House. He too expressed support for the jury system. He too sensibly advised us that the Government should not just consider legislation on fraud, but consider ways of making things less complicated. He rightly said that the more complicated the system—he cited the tax credits system—the easier it would be for bad people to cheat. He too raised the issue of the maximum sentence in clause 11, which I think it is sensible to deal with in Committee.
	The hon. Member for Rhondda (Chris Bryant) took a zoological canter through the Bill—if it is possible to take a zoological canter; perhaps not. He talked of phishing, Trojan horses and money mules. Essentially, his point was that fraud is an international crime which can be perpetrated by three separate people from three separate jurisdictions, and which can have an impact on a victim in this jurisdiction. It may well be that international co-operation of one kind or another outside the confines of the Bill is necessary to help reduce fraud. The hon. Gentleman was sceptical about the need to retain the common law conspiracy offence, although I think he properly recognised that it might be necessary to retain it in order to establish the most appropriate way of dealing with phishing, Trojan horses and money mules. No doubt the Government will consider that over the next three years.
	The hon. Member for Meirionnydd Nant Conwy applied his legal experience to the Bill. He seemed less sure than Conservative Members about the need to abolish the common law conspiracy offence—not necessarily for the same reasons as the hon. Member for Rhondda—but I am happy to say that he was wholly with us on jury trial, on the need for tighter definitions, on the need for clarity in relation to mens rea or criminal intent in clauses 6 and 7, and on the wider and more general plea for clarity and certainty in the criminal law.
	Let me say something about clauses 6 and 7. I understand the concern expressed by my hon. Friend the Member for Beaconsfield, and understand and support the simple solution that he proposed in relation to clause 7. I may be able to assist the Government in that regard, although no doubt my hon. Friend will explain his ideas better in Committee. Simply removing the word "or" from clause 7(1)(a) and substituting the word "and" would do away with all the problems that we may face.
	The Government may ask what constitutes fraud within the confines of the Bill. Fraud is described in clauses 1, 2, 3 and 4. It requires criminal intent. The fraud referred to in clause 7(1)(a) is the fraud described in those earlier clauses. When we combine that with the word "knowing" in the same paragraph, we end up with criminal intent. My hon. Friend's solution is so much neater, simpler and clearer. A stroke of a pen could remove one little word and insert another: end of problem.
	There is a disjunction between the drafting of clause 7 and the drafting of clause 6, but as my hon. Friend said, what works in clause 7 ought to work in clause 6. If the Committee is to do itself any good—which I am sure it will, given a relatively benign and much welcomed Bill—it should concentrate on those two clauses, while obviously dealing with the difficulties presented by the word "expected" and the relationships issue raised in clause 4.
	That is quite enough from me. I told the Government Whip that I would speak until about 9.30 pm, because I knew that the House was keen to hear from me. I also wanted to ensure that my hon. Friend the Member for Tewkesbury (Mr. Robertson) was given the shortest possible time in which to explain the issues that affected his constituents. Joking apart, however, it is time for me to sit down and shut up—or possibly shut up and sit down.

Vernon Coaker: This is the first occasion on which I have spoken as a Minister in a Second Reading debate. As I am not a lawyer, I rise with a slight degree of apprehension, which is why I was grateful to the hon. and learned Member for Harborough (Mr. Garnier) for saying that I could write to him about clause 13.
	I welcome the broad support that has been expressed for the Bill. I thank the hon. Member for Beaconsfield (Mr. Grieve), the hon. and learned Member for Harborough, the hon. Members for Somerton and Frome (Mr. Heath) and for Meirionnydd Nant Conwy (Mr. Llwyd), and others on both sides of the House for responding constructively, while committing themselves to scrutiny in Committee to produce the better Bill that is our common goal.
	The hon. Member for Beaconsfield outlined three tests that he considered important. It was crucial, he said, to overcome complexity, to help prosecutors to prosecute those who committed the crime of fraud, and to adapt to the changing face of criminality—for example, in the context of new technology. I assure him that the Government agree with him about all those tests and aims. As for repeal of the common law offence of conspiracy to defraud, I repeat that, having listened to Lord Justice Rose and following various consultations, we decided not to repeal it but to review it after three years.
	Let me point out to the hon. Member for Beaconsfield that the views expressed in the other place changed during debates on the Bill. The hon. Gentleman said that Lord Lloyd saw no case for retention of the common law conspiracy offence. That may have been his initial view, but on 14 March he said that after speaking to Lord Justice Rose he was "wobbling down in favour" of retaining the offence. Even Lord Lloyd, having listened to some of the arguments, decided to change his view. He wobbled, which is enough for me.
	As has been said, non-jury trials will feature in another Bill and do not form part of this debate, but the points made today have been taken into account. As for clauses 6 and 7 and the mens rea issue, we believe that the requirement for an intention to use the articles in people's possession will provide a safeguard against idiotic prosecutions. As my right hon. and learned Friend the Solicitor-General made clear, those are not strict-liability offences. Case law has established that the phrase
	"for use in the course of...any fraud"
	means that the prosecution must prove at least a general intention of committing a fraud. Anyone who has no such intention has nothing to fear from these provisions. Whether they are conjurors or innocent members of the public, safeguards are provided by case law.
	I thank my hon. Friend the Member for Tamworth (Mr. Jenkins) for what I thought was an important and worthwhile contribution to the debate. He made the point that the Bill is only part of the solution. That is absolutely right. He suggested the need, for example, for specialist fraud judges and perhaps for specialist fraud courts. Those are useful proposals and I assure him that we will put them into the fraud review, which will report shortly.
	My hon. Friend raised a number of issues to do with receiving digital television and no doubt he can argue his points in Committee; I am sure that he looks forward to serving on that. He made the important point, which the hon. Member for Broxbourne (Mr. Walker) also made, that fraud is not a victimless crime.
	My hon. Friend said that there is no definition of dishonesty. Although there is no definition of dishonesty, the established test results from the case of Ghosh. Although that is case law, it is approved by the House of Lords and it has been in use for almost 25 years.
	The hon. Member for Somerton and Frome raised many of the issues that we will need to look at in more detail in Committee. With that assurance, I will not mention all the points that he made. For example, we can discuss in Committee the issue of nationality jurisdiction. We do not think that the same justification for extra-territorial jurisdiction exists as it does for corruption. The corruption of officials overseas is dealt with in several international conventions. That stems from concern about corruption in developing countries and its effect on their stability. In contrast, fraud is a huge issue across the world—domestically as much as internationally. Corruption is also far less common than fraud. The resource implications for "policing" UK nationals worldwide for fraud are therefore much larger. The cost would need to be carefully examined before any party committed itself to it. If a UK national commits a fraud in Hong Kong that has no effect in the UK and no part of the fraud was committed in the UK, do we want the SFO to pay to send a team to Hong Kong? A degree of caution is needed with respect to that matter, but, as I say, it is an issue that we can debate in Committee.
	The hon. Member for Rugby and Kenilworth (Jeremy Wright) was right to draw attention to the need for an appropriate penalty for obtaining services dishonestly. In response to his question about the maximum sentence, I draw his attention to the fact that the existing offence of obtaining services by deception carries a maximum sentence of five years' imprisonment. The Law Commission examined that issue and saw no reason why the maximum for the new offence should not be the same. The Government's consultation likewise did not elicit any demand for the creation of a higher maximum sentence. Therefore, the Government concluded on the basis of the Law Commission and the consultations that we undertook that the maximum sentence of five years was appropriate.
	My hon. Friend the Member for Rhondda (Chris Bryant) reminded us, as always, of the importance of people. As others have made clear, it is important continually to make that point. Although some people find the issue of fraud dry and not very interesting, it impacts on thousands of people across the country. Therefore, today's debate is particularly important.
	My hon. Friend made an important point when he talked about the issue of training for the police. I assure him that the police, particularly the ACPO national fraud working group, are playing a full role in developing the policy in the Bill. They have publicly welcomed the Bill and look forward to its early enactment. The City of London police are using their experience to look at how they can train police forces throughout the country in ensuring that it is as effective as possible. Indeed—this will be of interest to the barristers here—the Crown Prosecution Service is also looking forward to issuing advice to prosecutors to ensure that it is as effective as possible.

David Heath: As the Minister happens to be mentioning advice that will be given, I wonder whether the Solicitor-General could provide me and perhaps other members of the Committee with the guidance on the use of the conspiracy to defraud offence. It was mentioned in the debate in another place but so far we have not had sight of the draft guidelines.

Vernon Coaker: The Solicitor-General informs me that he is happy to do that in due course.

Chris Bryant: I referred to the issue of the suborning of a police officer. Everyone in the Chamber seemed to be nodding their heads. I recognise that the Minister may not be able to respond directly to that today but it is an issue that has been lying around for quite a while and I wonder whether he would like to make some reference to it.

Vernon Coaker: That is an interesting and important point but it is not one for the law on fraud.
	The hon. Member for Meirionnydd Nant Conwy emphasised the need to ensure that the law is as simple as possible. The Bill will do that—it will help to simplify a range of deception offences. It will help juries and magistrates to deal with what, as he and I know, can be extremely complex matters.
	On the issue of why "knowing or intending" is not included in clause 6, we should bear it in mind that we are building on existing offences and that the "going equipped" offence in the Theft Act 1968 applies not only to burglars but to those who have equipment to commit a fraud, which it describes as a cheat. The only problem with that Act is that it does not apply to fraudsters who operate from home. We already have nearly 40 years' experience of the operation of that provision and we are not aware of any problems of innocent persons being troubled by it.
	The hon. Member for Broxbourne pointed out, in his wide-ranging but interesting speech, that fraud is not a victimless crime. The Bill will help to tackle many of the examples that he gave of victims of fraud.
	We have faced a growing threat from fraud. Tackling it requires effort by all concerned on several fronts and on prevention as well as enforcement. However, modernisation of existing criminal law is one essential building block. The existing statutory offences are specific and overlapping, yet they are not related to each other to convey the variety of fraudulent behaviour in an organised way. That untidiness in the law means that it is not always clear which offence should be charged and defendants have successfully argued that their particular deceptive behaviour did not fit the definition of the offence with which they had been charged.
	Our reform efforts date back to 1998, when the then Home Secretary asked the Law Commission to consider whether a general offence of fraud would improve the criminal law. This is a tricky area of the law and the commission consulted stakeholders and gave the issue the most careful consideration. The 2002 report was the result. It decided that it was not a realistic solution to plug loopholes in fraud law by adding more specific offences, as has been done in the past. Such piecemeal law reform leads not only to further complexities and the potential for charging defendants wrongly, but means that the law will always be lagging behind any development in technology or new methods of committing fraud—a point that the hon. Member for Beaconsfield made.

Geoffrey Clifton-Brown: I congratulate the Minister on his promotion. Clearly criminals are increasingly using more sophisticated IT methods, on which the police will need to be constantly trained and retrained. Can he give the House some assurance that the police have systems in place to be able to do that and that they are not going to find that they are continually outsmarted by ever-smarter criminals?

Vernon Coaker: I thank the hon. Gentleman for his good wishes. There is always a race between the police and the criminal. The police are always racing to keep up with the criminal, but in the brief time I have been in post I have been to the Serious Organised Crime Agency and other agencies that are at the cutting edge of technology and are trying to ensure that they keep up with the criminal. They are soliciting support from all over to try to do that, including from the private sector. I have seen examples of those agencies working with various internet and computer companies, using their expertise and experience to try to ensure that, as far as possible, they keep up with developments in IT and the internet to tackle crime in the way that we would all want.
	Our reform dates back to 1998, when the Home Secretary asked the Law Commission to look at this issue. The 2002 report was the result, and it was decided that the proposal to which I referred earlier was not a realistic solution that would plug the loopholes. Piecemeal law reform leads to further complexities and to the potential for charging defendants wrongly. As I said, the law will always lag behind new developments in technology.
	The Bill introduces a general fraud offence, as recommended by the Law Commission, which does not focus on specific acts, as previous fraud statutes have done. Instead, it defines three broad ways in which fraud can be committed. The aim is to cover a variety of fraudulent behaviour, and that the offences should continue to be relevant as methods of committing crime and technology change and develop. The offence of obtaining services dishonestly is also important, as it plugs a legal loophole whereby fraudsters obtain services over the internet but are not subject to the current fraud law, as they have not deceived a person.
	The shift in emphasis that the Bill brings—toward dishonesty and away from deception—is a critical and powerful element of this legislation. While it has always been the case that attempts to commit deception offences can be charged, the Bill simplifies the law and avoids the difficulties that arise from the narrowness of the existing offences. In simplifying the law, the Bill will make it more easily comprehensible to juries and the general public, and make the prosecution process more effective by providing a clear definition of fraud. The aim is to encompass most forms of fraudulent conduct within a law that is flexible enough to deal with developing technology. That could prove particularly beneficial in complex and serious fraud cases, and could shorten the time taken by each trial and lead to more efficient prosecutions.
	In the end, the Bill will help us to prosecute the criminal and to defend victims—a goal common to us all. I commend it to the House.
	 Question put and agreed to.
	 Bill accordingly read a Second time.

FRAUD BILL  [LORDS] (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
	That the following provisions shall apply to the Fraud Bill [ Lords]:
	 Committal
	1. The Bill shall be committed to a Standing Committee.
	 Proceedings in Standing Committee
	2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 22nd June 2006.
	3. The Standing Committee shall have leave to sit twice on the first day on which it meets.
	 Consideration and Third Reading
	4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	 Other proceedings
	7. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed —[Mr. Michael Foster.]
	 Question agreed to.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Immigration

That the draft Immigration (Provision of Physical Data) Regulations 2006, which were laid before this House on 2nd May, be approved. —[Mr. Michael Foster.]
	 Question agreed to.

railways

Ordered,
	That the Railways and Other Guided Transport Systems (Safety) Regulations 2006 (S.I., 2006, No. 599), dated 9th March 2006, be referred to a Standing Committee on Delegated Legislation.— [Mr. Michael Foster.]

COMMITTEES

Mr. Deputy Speaker: With the leave of the House, I shall put motions 5 and 6 together.
	 Ordered,

Home Affairs

That Colin Burgon and Steve McCabe be discharged from the Home Affairs Committee and Margaret Moran and Martin Salter be added.
	 Ordered,

Statutory Instruments

That David Maclean be added to the Joint Committee on Statutory Instruments. ——[Mr. Alan Campbell, on behalf of the Committee of Selection.]

PETITION

Royal Shrewsbury Hospital

Daniel Kawczynski: I present a petition about the Royal Shrewsbury hospital, which is a very important hospital that covers not just the residents of Shrewsbury but many people throughout the whole of Shropshire, and many in mid-Wales who come across the border to use our services. It has been signed by 2,968 of them and reads as follows:
	The Petition of concerned residents of Shropshire and mid-Wales
	Declares that there is a severe financial crisis in the Shrewsbury and Telford Hospital NHS Trust that is threatening services at the Royal Shrewsbury hospital.
	The Petitioners therefore request that the House of Commons urge the Secretary of State for Health to introduce legislation to provide funding to solve the financial crisis of the Shrewsbury and Telford Hospital NHS Trust, and to secure future services in full at the Royal Shrewsbury hospital.
	And the Petitioners remain, etc.
	 To lie upon the Table.

HEALTH SERVICES (GLOUCESTERSHIRE)

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Michael Foster.]

Laurence Robertson: I rather regret the need for this debate, but having said that, I am pleased to have secured it and thank the Minister for attending. I want to set out the picture regarding health services in Gloucestershire and seek clarification from the Minister on a number of issues.
	There are three primary care trusts in Gloucestershire and one hospital trust. Cheltenham and Tewkesbury primary care trust, which covers most, but not all, of my constituency, is in surplus, but other trusts have been in deficit. The result is that across the county, there are some £40 million-worth of deficits. All the trusts together are proposing cuts in health services amounting to some £30 million, as things stand.
	There is of course great opposition in Gloucestershire to this proposal. I have a petition with more than 2,200 names on it, which I hope to present to the House in the next few days. That constitutes a high percentage of the population affected. Indeed, there have been rallies and marches across Gloucestershire. My hon. Friend the Member for Forest of Dean (Mr. Harper), who cannot be here tonight, initiated a debate in the Chamber on 25 May, and he has been very active in opposing the cuts. Indeed, there is united opposition to them throughout the House. Members from the Conservative and Liberal Democrat parties, and from the Government party, will seek to catch your eye to contribute to the debate, Mr. Deputy Speaker, and it might be helpful if I confirm that they have approached me to ask for permission to do so.
	I should say at the outset that we of course have no disagreement with organisations balancing their books; every organisation must do that. Also, no one is going to accuse the Government of having cut spending on the health service, as that is not the case, so I hope that the Minister will not defend the Government against charges that I am not going to make.
	I turn first to my main, particular and most immediate concern—I shall come on to others shortly—which is the proposal to close Winchcombe hospital. It was built in 1928, with a lot of the funding provided by local people and benefactors. It provides a caring and comfortable convalescence for people, especially older people, recovering from operations or other treatment. It also provides a very helpful minor injuries unit in a rural area where public transport is not particularly useful.
	The White Paper on community hospitals issued some while ago made it clear that community hospitals should not close
	"in response to short-term budgetary pressures."
	Sensibly, it recognised the value of, and need for, such hospitals—as, indeed, do I. I was recently treated at Tewkesbury community hospital within five minutes of having had a rather nasty car accident. The staff were excellent, and I pay tribute to them, and place on the record my thanks to them. The alternative to that treatment would have been a long car journey and delayed treatment, thereby putting additional pressure on staff at, say, Cheltenham or Gloucester hospital. So although the White Paper opposes such closures, that is exactly what is being proposed in Gloucestershire.
	People in Winchcombe are united in total opposition to the proposed closure of their hospital; they value it and they need its services. If it closes, they, too, will have to go to Cheltenham or Gloucester for immediate treatment, and those who are currently being treated or operated on in one of those hospitals will, presumably, have to be sent home early if Winchcombe hospital closes.
	I acknowledge that there is a debate going on about how long people should stay in hospital, and I accept that nowadays, some people can go home earlier than they might have done in the past. Often, home is the best place for people to recover, but not always. A while ago, my daughter was sent home from hospital after a major operation the very next day, even though she had no one to look after her and had two children to look after herself. That is unacceptable these days, but if we close hospitals and reduce bed numbers, it will become common practice, which I would greatly regret.
	Have the people who make these decisions considered the knock-on costs—to social services, for example? Have they calculated when people need help at home? In the light of meetings that I and others have had with Gloucestershire county council, which would have to provide many such services, it appears that those knock-on services have not been costed. According to the local primary care trust, they have not been costed. Its director of finance said today, when asked about the future alternative proposals:
	"we have not calculated detailed costs yet."
	How does it know that the books will balance even after the cuts have been made, if those cuts have not been thoroughly thought through or properly costed? What that director did confirm was that closing the hospital will save only an estimated £240,000 a year. How can that be right? How can that make financial, let alone clinical, sense?
	I am also concerned by the lack of joined-up thinking about the knock-on costs, and generally. For example, just recently the doctor's surgery in Winchcombe closed, and it was proposed that another one be built outside the centre. Why was no consideration given to moving the surgery to the hospital, and expanding the services available there instead of cutting them? The surgery would have remained in the centre of the town, where many old people live, and there would have been no need to build another one.
	If the hospital is not needed, why are local health chiefs considering buying in several beds, for the very purpose of convalescence? We already have 22 beds at Winchcombe hospital, so why lose them and buy in beds from elsewhere? I totally oppose the proposal to close the hospital, but other cuts across the county also worry me.
	For example, Delancey hospital, which is just outside my constituency and in that of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), is also proposed for closure, but it provides a good service. St. Paul's maternity wing in Cheltenham general hospital was opened just 10 years ago at a cost of £6 million, and that is proposed for closure. The overnight facilities at Battledown children's ward, also in Cheltenham hospital, will be closed, and other hospitals in neighbouring constituencies are closing. Mental health units are being proposed for closure, and further cuts are being "considered", but are not confirmed yet.
	All that represents short-term thinking. Where will it end? The proposed closure of those and other services is extremely worrying. Why are we having those cuts at all, and whose fault are they? People are taking a stand not only because of the present proposals, but the further ones that they fear. We are not a third world country—we are supposed to be the fourth largest economy in the world—so why do we face those cuts? Are we not entitled to expect enhanced, more efficient health services, not just services cobbled together to match the particular budgetary pressures at the time?
	On 6 April 2005, the Prime Minister said from the Dispatch Box:
	"It is correct that we raised national insurance to pay for extra investment in the national health service."—[ Official Report, 6 April 2005; Vol. 432, c. 1409.]
	My constituents have paid the extra tax, but where is the money going? All they are seeing is cuts. Yes, they are getting vague promises from local health chiefs about better provision being on the way, and that health care will be provided in a different way in future. Well, we will believe it when we see it. If there is a better way to treat patients, why was not that way pursued before? Why does it take budgetary pressure to force decision-makers to follow the correct clinical path?
	Who is to blame? It is an interesting question. No doubt the Government have increased funding, but have they increased their requirements from trusts to the extent that the extra money has been swallowed up in extra costs? Or have the local health chiefs mismanaged the extra expenditure? I would like the Minister to give me her view of Gloucestershire, because I do not necessarily blame the Government. I want to explore tonight exactly where the fault lies. Who is to blame for the deficits? What is the Minister's view? How do we sort the deficits out? It could be done by closing front-line services and making patients suffer, but it could also be done more sensibly, given a little more time.
	The question that I would most like the Minister to answer—it is a crucial question that has been raised before—is about the balancing of the budget. The local trusts claim that they have to balance their books for the whole of this financial year, including making up historic deficits within this financial year. I quote from their consultation document published just today:
	"PCTs have to achieve in-year balance and recover 2005-6 deficits".
	They say that they have been told, unequivocally, that they have to do that. They told hon. Members that that was the case just last Friday. However, the Secretary of State, in a letter to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), said that trusts would be expected to make improvements this year and achieve month-by-month balance by the end of the financial year. That is quite a different thing.
	In a statement last week, the Secretary of State said again:
	"We are aiming for all organisations with deficits to reach monthly balance of income and expenditure by the beginning of April next year."
	She went on to say that in some cases, the worst ones will be allowed even more leniency. Who is right? Do the trusts have to achieve total balance for the year, including historic deficits, or do they have to achieve monthly balance by the end of this year? Because if the Secretary of State is right, the consultation paper in Gloucestershire has been launched on a false, even dishonest, premise.

David Drew: The hon. Gentleman knows my position on this issue, but an answer to his question would greatly help the strategic health authority. When I saw Trevor Jones, the chief executive, 10 days ago he made it clear that if the strategic health authority was given guidance that the aim was a month-by-month balance, it would change its interpretation of the strategic framework. It is vital that my hon. Friend the Minister provides some guidance, because we may be working on false premises.

Laurence Robertson: I am grateful to the hon. Gentleman, and I know that he shares my concerns. He makes the point well: the strategic health authority is in touch with the primary care trust and providing instructions—I nearly said guidance—but we do not know whether they are correct. If we go by what the Secretary of State says—and that is in writing—the SHA's interpretation is wide of the mark. I hope that the Minister will clarify the situation. I reiterate that the trusts should balance their books, but how long have they been given to do it? If it can be done over a slightly longer period, the cuts might not be necessary.
	I wish to make a further point about top-slicing. The PCT covering most of my area in Cheltenham and Tewkesbury was actually in surplus last year. However, it is cutting front-line services to help to balance the books of others. That, it seems, is the penalty for achieving better financial management. As if that were not bad enough, the Government are forcing the Gloucestershire trusts to bail out the others under the same SHA to tune of more than £6 million.
	In her statement last week, the Secretary of State said that
	"that money will not be lost to those communities. It will be repaid, normally in the three-year allocations period."
	However, she went on to say:
	"I have stressed to the health authorities that the areas with the greatest health needs should be repaid first".—[ Official Report, 7 June 2006; Vol. 447, c. 254.]
	So Gloucestershire will actually lose that money, and if the hospitals are closed anyway they are not likely to re-open within that three-year period.

Martin Horwood: Does the hon. Gentleman agree that there is added nonsense in the concept of repayment in that particular case, of which the Minister may not be aware? For Cheltenham and Tewkesbury PCT to ask for the money to be repaid to it by Cotswold and Vale is a nonsense, because the two will merge in any case. So the money lost to Cheltenham and Tewkesbury will never be repaid.

Laurence Robertson: Indeed, this becomes more complicated because the three trusts are merging into one. I am not making a point about one area against another, and west Gloucestershire makes up a large part of my constituency. However, it does appear that good financial management is being penalised by that top-slicing.
	In fact, Gloucestershire loses out in the first place when it comes to funding. We receive only 88 per cent. of national average funding. That is supposed to be because we are healthier, but—as local health chiefs point out—healthy people live longer, and older people cost the NHS even more money. So where is the joined-up thinking in that particular philosophy? Where is the joined-up thinking about the NHS generally?
	To follow up the point made by the hon. Member for Cheltenham (Martin Horwood), I should explain that when I was elected in 1997 there was one Gloucestershire health authority. At present there are three PCTs, but there is a proposal to revert to one; in other words, we are to go back to exactly where we were nine years ago, except that there is now another tier of bureaucracy—the pointless strategic health authority, which costs more than £5 million a year to run. Even that is being tinkered with, because it will cover a different area. The situation is ridiculous. A number of PCTs and hospital trusts, under a single SHA, are making far-reaching decisions. Those PCTs will not exist come October, and the SHA will not exist in its present form by the end of the summer, yet massive cuts are being planned by people who probably will not be in post to carry them out—or to carry the can for them.
	I referred earlier to the consultation document published by the health chiefs today. They wanted a consultation period of only five weeks, but Members and some members of Gloucestershire county council managed to exert enough pressure to get the deadline extended to 12 weeks. That is still not a long time, but, farcically, it takes us to the point when the people making the proposals might all be seeking alternative employment. At the end of the consultation period, none of them might be in post, such is the nonsense of the situation.
	As well as containing dubious phrases such as the one I quoted earlier, the document insults the intelligence of the people of Gloucestershire. Among other "motherhood and apple pie" questions, it asks:
	"Do you think that helping people to stay fit and well is an important principle?"
	For goodness sake, what kind of smokescreen, what kind of sham, is this public consultation exercise? Will the people be listened to or will their views be ignored, as they normally are?
	There is an unhappy situation in Gloucestershire. We are paying more tax to fund the NHS, yet we are losing our hospitals. The Government are piling billions of pounds into the NHS, yet a quarter of the country's PCTs are in deficit. Local health chiefs say that they have to balance the books within the current financial year, yet the Government say that they have to achieve a monthly balance. The Government claim that they are reforming the NHS, but in truth they are merely tinkering with its structures. The net result is that the people of Gloucestershire, especially older people, children, poorer people, the pregnant and the mentally ill—in other words, the vulnerable—all lose out.
	As I said at the beginning of the debate, I do not seek to blame the Government; I am trying to bring home to the Minister the strength of opposition in Gloucestershire to the proposals being made across the county. Will she clarify exactly what she is asking trusts to achieve financially this year? If she only does that we shall have made some progress, but otherwise the most vulnerable and the most in need will lose out.

David Drew: I congratulate the hon. Member for Tewkesbury (Mr. Robertson) on initiating the debate. This is the fourth such debate in which I have taken part over the last month: two of them were about health in Gloucestershire, the others were about maternity provision and community hospitals, which relate directly to my area, where I face the prospect of losing both.
	Like the hon. Member for Cotswold (Mr. Clifton-Brown), I took part in the rally in Stroud on Saturday—I mentioned it to the Minister before we came into the Chamber. It is estimated that about 4,000 people were at the rally, at which both the hon. Member for Cotswold and I were able to speak. There was immense feeling about the proposals and I said that I would echo it in the Chamber—it could certainly have been heard at Westminster.
	Earlier today, I took part in a meeting of the overview and scrutiny committee organised by the county council, which included representatives from the district councils. I have come straight from that meeting, which is why my brow is more furrowed than normal, and I want to raise with the Minister some points about the consultation on partnership trusts. As the hon. Member for Tewkesbury said, although we managed to extend the PCT consultation so that it takes place over 12 weeks, the consultation period for the partnership trusts—the mental health and learning disability trusts in Gloucestershire—will finish on 23 June, which is a mere five weeks. Without putting words into the mouth of the overview and scrutiny committee, it is fair to say that it is looking carefully into the discontinuity between the PCT consultation, which has yet to start formally, and the consultation on partnership trusts, which has reached the mid-way point, if not the final stage. I hope that the Minister will comment on that, as the situation does not make much sense; another £12 million has yet to be found from the PCTs and, given what they could later demand, that could have an enormous impact on the partnership trusts.

Geoffrey Clifton-Brown: The hon. Gentleman raises an important point, because there is no reason at all for the dissimilarity—for the general consultation to take 12 weeks and the consultation on mental health partnerships to take only five weeks. The overview and scrutiny process for mental health partnerships should be just as long because the mentally ill need more time to adjust to the changes that will be brought on them and those making representations on their behalf need more time to make their case.

David Drew: I agree and make no apology for concentrating on that point, because that is the most urgent consultation. On Saturday, the hon. Gentleman heard a lady make a most emotional speech about the implication of the proposals for her nearest and dearest. People feel very let down because they have been given almost no time or opportunity to make their case.
	The Chamber heard the request of the hon. Member for Tewkesbury that the Minister clarify whether we are talking about a month-on-month balance or historical deficits that have to be cleared in a matter of months. We need an explanation, because that is the nub of the problem we face in Gloucestershire.
	There is a second problem and I make no apology for continuing to labour the point, because it is important: the relationship between Gloucestershire and its partners in the SHA. It is hardly acerbic to note that Gloucestershire feels let down by the fact that it happens to be in a strategic health authority, other parts of which have run up large deficits over a period of time. The hon. Member for Tewkesbury made several points about why that should not have been allowed to happen, but it has been allowed to happen. As a result, according to the operating framework that the SHA is passing down on tablets of stone, Avon, Gloucestershire and Wiltshire SHA is being asked to reduce its turnover by 5.3 per cent., against a national average of 3.4 per cent. That may not sound much, but there is still a problem. Some trusts in Gloucestershire have been in balance or close to balance, although it is true that Cotswold and Vale PCT, which is my PCT and that of the hon. Member for Cotswold, has been a problem for a long time, but that problem does not extend to other parts of the SHA. We are being asked to provide ballast across an area for considerable problems in the past. We know that, because about £175 million from the NHS bank has gone elsewhere into other parts of the SHA, not a penny of which was ever put into Gloucestershire, even though Cotswold and Vale has had its own problems. I ask the Minister for a commitment that we shall get some real figures—disaggregation of the figures—for the entire SHA, even in breaking it down within primary care trusts so that we know where the money has been spent as well as where the cuts are being levelled. It is vital that we know where the real money has gone and how that money can be accounted for.
	I have one request from the overview and scrutiny committee, which I will put to the Minister. It wrote some seven weeks ago to the Secretary of State seeking clarification on budgetary issues. That was mainly in terms of the month-on-month balance. It has yet to receive a response from the Secretary of State. The committee seeks clarity and it wants to see the Secretary of State. I pass on to my hon. Friend the Minister that urgent request. The committee is now mid-way through the first of its consultations. Yet it could be labouring under a great misapprehension, as the hon. Member for Cotswold rightly said. The committee could be being asked to make a decision on something that is a false premise. There should be quick clarification.
	I will concentrate rather more on the partnership trust, the mental health and learning disability trust in Gloucestershire, which is mid-way through its existing consultation. What is the trust being asked to save? I have already said that the national average is 3.4 per cent. in turnover. The SHA is asking us to save 5.3 per cent. in turnover. The partnership trust is being asked to save 12.8 per cent., which is £9.6 million, of its planned expenditure. I do not know whether that means one and the same as turnover. However, I take it to be that an even greater amount of savings is required of the partnership trust than anything else that is being required within Gloucestershire, and maybe within the entire SHA.
	As the hon. Member for Cotswold said clearly, about 36 per cent. of older people's services for mental health and learning disabilities are to be cut. That is a huge reduction in expenditure. It is all driven by the mad idea that we have to come into balance. I do not know where the figures come from for the partnership trust. That is given the historic overspend, which I did not know was there until suddenly it appeared, and the deficit that is coming this year. I do know where the £2.2 million comes from, which is the contribution to the NHS recovery programme. That seems so unfair given the other cuts that have to be made.
	It would help me and other Gloucestershire Members who are in their places this evening to know exactly where the figures come from and why a small trust—a specialist trust—is being asked to make a disproportionate contribution in trying to come back into balance. This makes a big difference to my constituency because of the potential changes at Weavers Croft. It is not likely that Weavers Croft will close completely but it will lose its beds. We do not know the impact of the beds that were brought across from Bourton ward in Cirencester, in the constituency of the hon. Member for Cotswold. As far as I know, that has never been evaluated given the impact that that had when we had some 120 beds for older people's services. We now intend to cut the number to 65 if the proposals are adhered to.
	I move on to the Tyndale centre in Dursley in my constituency, where we have already lost day centre provision. That has been lost also at Weavers Croft. There must be questions about whether those facilities will ever be picked up and from where they will be run. As was rightly said by the hon. Member for Tewkesbury, we must focus on the impact, which will be dramatic on social services. I heard the social services committee make a presentation to the overview and scrutiny committee. I was not clear whether anyone has undertaken a detailed impact analysis of the changes that are being proposed. If that has not been undertaken, somebody should see that it is. In this place, we would never allow the nature of proposals to be given superficial treatment, which is what they appear to be receiving. That is not a criticism of the overview and scrutiny committee because it is saying that it has unclear and scanty information about the different proposals.
	The organisations in the voluntary sector need to be brought into the process. Underneath the radar, as well as the institutions that are much loved and being fought over, many other changes are being proposed. For example, it is proposed that there should be a 50 per cent. further cut in the passenger transport service. In Gloucestershire, if someone does not have a car they have no quality of life. If someone does not have a car and he or she is ill, it is unclear how they can get to the necessary services. The local newspaper—I refer again to the lady who spoke on Saturday—ran a particular campaign to try to get her to Cheltenham. Visiting took two hours and the situation was difficult for her. Is that something that people can and should be asked to do?
	I could go on much longer about the impact on maternity provision. There will be future debates in this place and I have no doubt that, if we do not get satisfaction, we shall go on to examine some of the other service provision, such as the community hospital closure programme, including the Berkeley hospital, which will not save any money because the idea is to move Berkeley up to the Cam and Dursley area. In some instances that makes sense because that is where the larger population is. However, I am not in the mood to agree to a cut in provision when we have no money, apparently, to re-provide a better service anywhere. It would be daft for any Member to say, "I can see that that will be a good move." We are being asked to make dramatic cuts without any possibility of new investment coming into the county. It would be ludicrous to go along with the proposal unless we have some clarity on what needs to be done.
	I ask my hon. Friend the Minister to provide clarity so that we can nail tonight what we mean by coming into balance. We must examine the particular problems of the strategic health authority. These are matters that are serious to Gloucestershire. We feel unfairly treated because of the nature of the SHA with which we unfortunately happen be placed. We need clarity also about the series of consultations that are being held so that we understand more about the impact analysis. That is clearly not happening at present. That is all to do with the speed at which the changes are being driven through. The direction may be right, but we need to separate the direction from the financial imposition. We certainly need to separate it from the speed at which people are being asked to make drastic decisions that have an impact on the young and the old and everyone else who is either a carer or someone who really cares for the facilities in question.
	I hope that my hon. Friend the Minister has listened to these difficulties. She will hear about them from hon. Members on both sides of the House. I hope that she will realise also that this is not a party political issue. All the parties are united in Gloucestershire. We need some help, otherwise we will see services lost that have been in place for a generation and more, and for no purpose whatsoever.

Martin Horwood: I congratulate my hon. Friend the Member for Tewkesbury (Mr. Robertson) on securing this important debate. As my parliamentary neighbour, the hon. Member for Stroud (Mr. Drew) has said, there is all-party agreement and all-party concern among the people of Gloucestershire about the effect that this financial crisis is having on us. I must declare an interest, in that my wife works for Cheltenham and Gloucester primary care trust. Her job is at risk along with everyone else's. I am certainly not pleading on her behalf this evening.
	Why are we here? Are we here to complain about less money for healthier, wealthier areas? No, I am not. I accept the principle that health service funds have to be targeted and that that may mean that areas such as Gloucestershire receive less funds per capita under some circumstances than areas of greater overall deprivation. However, one of the problems with the cuts and the savings proposals that are being imposed on Gloucestershire is that even in towns that may be prosperous as a whole, such as Cheltenham, there are areas of deprivation. It is the most vulnerable and poorest people in those towns who are being hit hardest, because they are the people without transport. They are the people who find it difficult to access services in other towns.
	Are we here to blame local NHS managers? That is what the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Tottenham (Mr. Lammy), said on "Newsnight" last week. He was asked whether local NHS managers were to blame and he said, "Yes." But surely that cannot be true. As neighbouring Members have said, in Cheltenham and Tewkesbury in particular, we have a partnership trust with three stars that was about to be in the first wave of foundation trusts; Gloucestershire Hospitals NHS Trust, which is a low-cost provider of health care by national standards and is very efficient; and, above all, Cheltenham and Tewkesbury primary care trust, which has never been in deficit and this year posted a £1.2 million surplus. Our NHS managers have done everything right. They have done everything that the Government asked of them. The primary care trust was described in  The Daily Telegraph, which I do not often read, but which I am sympathetic to today—as arguably "the perfect PCT" that has done everything that the Government asked.
	Are we discussing how patient care is improving everywhere, as the Secretary of State told the House last week? Well, no, that cannot be true either, although I will prevent the Minister from having to recite the usual things about additional investment in the NHS by saying that I am pleased that there has been additional investment in the NHS. I recognise that, and my party welcomed and supported additional investment in the NHS. We acknowledge the real improvements in health services that have taken place, including the reduction in waiting lists. However, that is not the issue today. The way in which the Government have gone about delivering that spending has led to breathtaking inconsistencies and results that I am sure that they did not intend, but which are proving devastating for our local NHS. We have overspending on things such as the GP contract, the consultant contract and the new out-of-hours service, and even on worthy initiatives such as NHS Direct, which I understand has gone massively over budget.
	We have the nonsense of consultants being flown in to Cheltenham general hospital from Germany and France to meet Government waiting list targets at enormous expense at a time when we are facing cuts in front-line services. Initiative after initiative and target after target are being imposed on local managers to the point where it is impossible for people to keep track. Let us think about the simultaneous initiatives that are going on at the moment: payment by results, patient choice, agenda for change, practice-based commissioning, the change to the trusts' funding tariff, the change to funding NHS dentistry, the reorganisation of the strategic health authorities, and the reorganisation of the primary care trusts, which means that the very managers who are supposed to be coping with all this change and coping with the cuts in front-line services are in the process of having to be made redundant and applying for new jobs themselves. It is little surprise that the overall sense is of panic and confusion and that, as the hon. Member for Stroud pointed out, there is a real misunderstanding of exactly which numbers are which and whether savings have to be made month by month, or whether we are talking about clearing all the financial deficits in one year, which is the line that has been fed down to local managers, as they understand it.
	Then we have the political decision—in effect, the political decision that the deficits, however they have arisen and whoever's fault they are, have to be cleared in one year and have to be funded not from other areas of Government spending, but from the successful areas of the NHS such as ours. There is no law that says that the NHS has to live within its means in any particular budget year. Once the deficits have arisen, it is a political decision as to how unsuccessful areas are bailed out. If one wants to be brutal and insist that they live within their means and make up the whole deficit in one year themselves, that is one argument, but that is not what the Government are saying. The Government are saying, "Well, actually, we will bail them out. They don't have to live within their means this year." Where one bails them out from is the political decision. The Government are saying, "We won't bail them out from ID cards or from troop commitments in Iraq or any number of other areas of Government. We will bail them out from the most successful areas of the NHS such as Cheltenham and Tewkesbury."
	What result does that have for the perfect PCT that has done everything right? On 28 March, 27 Gloucestershire health community savings proposals were announced. I am afraid that no clinical justification was given with them. Of those proposals, 22 are about front-line care. For Cheltenham and Tewkesbury, this means that we have faced a triple whammy. First, our primary care trust economised and tried to live within its means—despite less funding for being a healthier, wealthier area. It made economies and did not launch initiatives that it could not afford. So we lost out there. Secondly, there is top-slicing, which the hon. Member for Stroud has talked about. Finally, we are losing services that we simply share with primary care trusts such as Cotswold and Vale, because they are our neighbours and, overall, we have to make savings on the basis of what has now been invented as the Gloucestershire health community. The promise that I was given about a year ago that the savings and the financial recovery plans would apply only in their own geographical areas has gone by the wayside.

Laurence Robertson: The hon. Gentleman makes some powerful points. Does he agree that there is a further problem, albeit a short-term one? Given that the PCTs are going to be changed this year, there could be redundancy payments and extra pension payments. I accept that that will be a one-off cost, but it will make balancing the books even more difficult. Is it not only reasonable that the trusts should be a given a little bit of time to balance the books?

Martin Horwood: I entirely agree with that. In fact, the atmosphere in which things are being done is so febrile that, at a recent meeting where all the county's MPs met the chief executives of the trusts, I asked about the impact of having to take more time—quite properly—over consultation. The impact was another £1 million of savings that they were told to find. The manager who replied to the question said that they did not think that even the existing savings proposals would make up the amount that they were being asked to save by the strategic health authority and, above it, the Department of Health. The atmosphere of financial crisis is all-pervasive. The numbers vary. I managed to find a total of £29 million, but the hon. Gentleman has mentioned figures in excess of £30 million.
	I am afraid that the result is not, as the Secretary of State believes, patient care improving everywhere. Instead, there are real impacts on front-line care. St. Paul's maternity wing is a first class maternity ward that is just 10 years old. We celebrate its 10th birthday party this Wednesday. It is in Sandford park at 12 o'clock if the Minister cares to come along. She might find a rather hostile reception. I was born in its predecessor hospital. We have had that service in Cheltenham since the 1940s—long before this Government were elected. My children were both born in the ward. It delivers 2,600 babies a year and serves a town with a population of 110,000 people. It draws in mothers who wish to give birth there from as far afield as Banbury, Malvern and Evesham, and even from beyond Gloucester in the Forest of Dean. One might arguably say that if one maternity ward were to close it might be Gloucester's rather than Cheltenham's, since Cheltenham's seems to be rather more popular. However, I would not want to encourage recent accusations of snobbery in that respect. The most important thing is that Cheltenham women want to give birth in Cheltenham.
	A patient safety argument has been made in favour of the proposal—rather after the event since it came up as a savings proposals. It is argued that bigger and better maternity wards are always safer. That might be true, but in the end that is an argument for the entire country going to St. Mary's in Paddington for their delivery. There is always a balance of risk to be struck. In a meeting today, midwives put to me the risk posed by combining dual centres into one centre. That makes the maternity ward more vulnerable to infections such as clostridium difficile and the much more widely known MRSA. The whole trend of obstetrics and midwifery recently has been away from big hospitalised units towards smaller, friendly units, and away from treating maternity as a sickness and towards regarding it as a healthy, normal process.

David Drew: The hon. Gentleman is making the case for Stroud, which is a wonderful midwife-led unit. I am sure that he will agree that there is a lot of evidence that, where obstetrics and gynaecology are in an acute setting, there is a tendency for more intervention, whereas obviously in a place such as Stroud and in midwife-led units elsewhere, there is a belief in natural childbirth, which is what a lot of women choose. If we close down Stroud and Cheltenham, we are taking away that choice.

Martin Horwood: I certainly agree that smaller, friendly units will have a tendency towards fewer interventions. The midwives I met to discuss this issue with, who were concerned—indeed, appalled—by the proposed closure of St. Paul's, were worried that a bigger, more industrial-scale unit at Gloucester would lead to more interventions, not fewer interventions, thereby achieving exactly the reverse of what Government policy is supposed to be. The notion of patient choice is ludicrous, because Gloucestershire has been left with a single maternity ward. Where is the choice? There is a choice of one, as we will close two maternity wards that would have provided some competition—in new competitive speak.
	The increased drive time to the new maternity centre in Gloucestershire poses a risk to Cheltenham. The drive from one of the poorest parts of my constituency, Clyde crescent, to Cheltenham general hospital takes five minutes in the middle of the afternoon. If maternity services move to Gloucestershire royal hospital under the proposal, drive time will increase to 23 minutes, which is a fourfold increase and represents nothing other than an increased risk.

Geoffrey Clifton-Brown: If the hon. Gentleman is concerned about the risk of travelling from Cheltenham to Gloucester, will he consider the position of my constituents in the north Cotswolds? It will take them at least 20 minutes to reach Cheltenham, even by ambulance, and they will have another 20 minute ride from Cheltenham to Gloucester, so they will indeed be at risk.

Martin Horwood: I am inclined to agree with the hon. Gentleman, as he knows the statistics in his constituency. However, in some cases the percentage increase in drive time is worse in urban areas than in rural areas.
	Turning to adult mental health services, which deal with some of the most vulnerable members of my constituency. The loss of non-geriatric mental health services at the Charlton Lane centre in my constituency will be reflected in the loss of adult mental heath places overall in Gloucestershire. The mother of a girl who suffers from paranoid schizophrenia—I shall change her name to protect her identity—recently wrote to me:
	"Younger patients, like Emily, will either go to an already existing hospital in Gloucester, whose beds will be heavily over-subscribed, or be...treated in their own homes by rapid response teams. These people cannot give the 24 hour treatment that Charlton Lane Centre gives, patients will be left in their homes to fend for themselves for much of the time. When Emily is poorly, the voices take over the whole of her thoughts and she is unable to cook, clean, shop or take proper care of herself. Those are the physical problems, added to these are the mental problems, the fear, the thought that someone will kill her is always very strong in her mind at these times, that is why she runs, to escape. The voices always tell her she is going to be killed, which in itself is a totally distressing and debilitating state of mind. There are lots of mental health sufferers in the community, but there are times that they can only properly be cared for on a 24 hour basis with properly trained staff in hospitals designed for this purpose. With this closure, there will be a chronic shortage of beds. I feel the Government and the Local Government will be letting down the most vulnerable section of our community with what is so obviously nothing more than a cost cutting exercise. A broken arm can mend at home once the patient has received the correct medical care, a broken mind requires a lot more care and attention if the patient is to survive."
	I could not have put it more eloquently. We need to consider whether the decision to provide more care in the community for mental health is the correct direction of travel. There is an argument for trying to encourage clients to be less reliant on institutional services, but surely that proposal, along with bed closures, should follow the successful implementation of community care. It is particularly brutal to close the service and hope that those vulnerable people will cope while it is withdrawn.
	There have been cuts in community nursing, health visitors and community palliative care, too. Surely, the Government should encourage such services in the new direction of travel, but I met nurses today who said that the implementation of the cuts had resulted in qualified district nurses being replaced by nursing auxiliaries. The mix of nurses in Cheltenham and Tewkesbury is 85 per cent. qualified and 15 per cent. unqualified nursing auxiliaries, but under the proposals, that will change to 50 per cent. qualified and 50 per cent. unqualified. Nurses will arrive in someone's home in the community and find that they have complex health needs. Those nurses may be unable to cope, whereas in hospital they could ask a more senior or qualified nurse for assistance. A palliative care nurse told me that she was certain that there would be a big impact on the care provided to patients. The first community palliative care nurse post has been frozen, although the population is ageing and improved therapies mean that people spend longer in the palliative care phase of treatment. As a result, more care is needed, not less.
	Finally, there is a deep sense of injustice in Cheltenham at the loss of overnight children's care at Battledown. The loss of that service is a stark illustration of the fact that, even though the clinical case was made for its retention, it was subject to a budget cut. A year ago, after a 27,000-signature petition and a £40,000 consultation, in which 98 per cent. of correspondence was in favour of the service, a recommendation was made to accept the clinical case for keeping overnight care at Battledown children's ward, as 350 children a year would benefit. I pay tribute to Julie Coles, Carol Jones, David Downie and many others who campaigned tirelessly for the service. The recommendation resulted in the acceptance by all three primary care trusts in Gloucestershire that a nurse-led unit should proceed. The decision that overnight care should be saved was minuted—I have provided the Secretary of State with a copy—but it was overturned only weeks before the launch of the unit on the basis of cost. It was listed as a savings proposal, and thus the death knell was sounded for overnight care.

David Drew: I know something about the issue, which I have debated as a governor of the acute trust. I agreed with the clinical judgment, but the campaigners made a great deal of effort to find an acceptable compromise. That was discussed properly by the acute trust, but none of the proposals, including proposals from the trust itself, were discussed by the governors. Does the hon. Gentleman think that that is the right way to proceed? There is a great deal of unease about the role of foundation governors, and this does not help.

Martin Horwood: I agree entirely, and I am sure that the hon. Gentleman agrees with 13 of his fellow governors of the NHS trust, who wrote to the Secretary of State on 11 April:
	"Over recent times, Governors, Members and local people have worked tirelessly in order to maintain overnight Children's Services at Cheltenham General Hospital. This and the wider services are now under threat, as are many others, including our Community Hospitals. All this makes the national requirement that significant NHS service changes need to be the subject of full public consultation to an absolute farce."
	I am afraid that the reply that we received from the Secretary of State was not satisfactory. On the subject of consultation, she wrote to me:
	"I am therefore advised that the decision not to proceed with a proposal does not require consultation as it does not constitute a service change because the service does not exist."
	I am sorry to say that that is breathtakingly out of touch with reality.
	There are many other savings proposals on the list that I would like to discuss, but time is limited. However, the closure of the Delancey hospital has raised fears about the hasty cutting of rehabilitative beds and care. The local branch of the National Council Women wrote to me:
	"We know that much of the responsibility for such care will fall on family members, usually women, and doubt that this will be satisfactory. Even care homes, where professional care is available, often have to send their residents to Delancey for specialized care. Relatives, no matter how well-meaning, will not be able to cope."
	Accident and emergency services and patient support services are under threat. The prescription of drugs following new guidance from the National Institute for Health and Clinical Excellence is one of the savings proposals, so it will be deferred. I am sure that the Minister would like to claim credit for Herceptin when it is introduced in the rest of the country, but it may not be available in Gloucestershire. There will be cuts to patient transport and access to acute care—the list goes on and on.
	We look forward to the consultation, but the result of the Battledown consultation does not give us great cause for hope. I beg Ministers to reconsider the situation in Gloucestershire, as the proposals will have an impact on one of the most successful parts of the NHS, which should be a model for other services. They must rethink the need to clear those deficits in a single year, if such a ruling has been imposed, and the damage to successful parts of the NHS, whoever is to blame for the original deficits.

Geoffrey Clifton-Brown: Thank you, Mr. Deputy Speaker, for allowing me to catch your eye in this debate. I congratulate my hon. Friend the Member for Tewkesbury (Mr. Robertson) on securing a constructive and—given the circumstances—good tempered debate. Rarely have I heard a debate in the House in which I have not disagreed with anything that other hon. Members have said. As my hon. Friend and the hon. Member for Stroud (Mr. Drew) made clear, this is a cross-party issue. There are no political differences between us. We are interested solely in our constituents in Gloucestershire receiving the best possible health care within the budgets available.
	I thank the Minister for being present this evening. As the hon. Member for Stroud said, she has been dragged to four such debates. She is in an unenviable position, but we would be grateful if we could get some answers and some clarity from her this evening. As has been pointed out by everyone who has spoken in the debate, the chief issue on which we need clarification is exactly what remit our primary care trusts are working to. Are they working to a remit of clawing back previous deficits, or are they working to a remit merely of bringing the situation back nearer to balance by the end of the financial year? That is critical.
	I hope that the Minister, who is consulting her Parliamentary Private Secretary behind her, will be able to give us the answer tonight. If she cannot, I should be grateful if she placed an answer in the Library as soon as possible. More important, I hope she will be able to give an instruction to the strategic health authority if the remit is different from the one to which it is working. If the SHA is working to the more severe remit, it may well be making decisions and unnecessary cuts to institutions. We had a dire announcement on what I call black Wednesday a few weeks ago, in which 12 of our health institutions in Gloucestershire were shut or severely curtailed, and several hundred jobs and 250 beds were to be lost.
	In my area, the Cotswolds, we had already had an announcement of closures in in-patient care in both Tetbury and Fairford. The in-patient care at Bourton is still subject to discussion, and we have had the curtailment of 10 beds in Moreton-in-Marsh community hospital, with the lure of the possibility of a new community hospital to replace those lost facilities in Bourton and Moreton—but only the lure, and with the scale of cuts that we are facing and the financial stringency, I wonder whether we will get any new facility builds. We may find beds being closed on the lure of a possible new facility, but we may well not get that facility. That type of comment pervades the whole debate. The hon. Members for Stroud and for Cheltenham (Martin Horwood) made that point clearly. In Cirencester I am faced with the cut of an entire ward of elderly mentally ill patients.
	We were on the march together on Saturday, as the hon. Member for Stroud said. We were marching not only to protect maternity facilities in his constituency, which are attended by people from my constituency, but to protest at the cut of Weavers Croft—further cuts in facilities for mentally ill patients. No new facilities are yet available in Gloucester, where all those elderly mentally ill patients are supposed to go. The existing facilities could be closed before the alternative is arranged. That would be a cruel irony for elderly mentally ill patients. The hon. Member for Stroud noted that a cut, if it is that, of 30 per cent. of the activity of the partnership or mental health trust is a huge cut, and it affects some of the most vulnerable people in society. My constituency used to have—I do not know whether the statistic is still up to date—the third highest number of over-80-year-olds of any constituency in the country. This level of cuts will affect my constituents very severely.
	At the meeting on Friday that all Gloucestershire's MPs attended with health chiefs, it was made clear that the proposals are being driven not only by financial considerations, but by the short time scale in which balances must be restored. The health chiefs have asked for a longer time. If facilities are being cut and people must adjust to the changes that are being made, the Government should allow a little more time and provide a little more certainty about what is happening.
	I repeat the plea that I made in an intervention on the hon. Member for Stroud that the partnership trust overview and scrutiny process should have the same symmetrical time scale—that is, 12 weeks. I say to the Minister in all sincerity that if we change the institutions where elderly people have been for many years, the very least we can do—a kindness that we can do for people in such a vulnerable position—is allow them plenty of time to get used to the idea of the changes that may well occur.
	As I said, we in the Cotswolds faced the closure of our community hospitals way back in March, long before the big announcement a few Wednesdays ago about the other institutions. With regard to Tetbury and Fairford, the overview and scrutiny committee submitted a case to the Secretary of State on 16 March 2006. It has yet to receive a reply from her. When is a reply likely? If the Minister cannot tell me tonight, perhaps she will let me have a note.
	I quote one paragraph from the letter from Andrew Gravells, the chairman of the overview and scrutiny committee, in which he states:
	"The local community have concluded that the changes are purely finance driven, which appears at odds with statements in the Government's own White Paper,  Our Health, Our Care, Our Say, which indicates that community hospitals should not be lost in response to short-term budgetary pressures."
	That is what worries me about this debate. We may close facilities in Gloucestershire, and facilities elsewhere that are facing the same budgetary pressures, and regret it later.
	With modern technology it is possible to do more treatment locally than was ever possible before. For example, with digital X-ray technology, it is easy to send X-rays to a consultant sitting many miles away at the district general hospital and get advice as to the sort of treatment that should be given. It can then be given locally, instead of all the time wasted by the patient having to be taken, perhaps by ambulance, to the district general hospital on another day with another appointment, with all that costing a great deal of money. I urge the Minister to look into some of the modern technologies available and see what can be done locally.
	As a chartered surveyor I am the first to suggest that we should not necessarily keep old Victorian facilities that cost a great deal of money in upkeep. That is not what I am suggesting. If they cost a large sum to maintain, for goodness sake let us sell them and build new facilities that are cheaper to maintain. In Fairford, where the local community has rallied round the League of Friends of Fairford Hospital, we have a very innovative solution. Since March, they have got a private sector provider involved, they have found a new site, they have been talking to the planners, who have given the matter favourable consideration, and it is possible for them to propose a package to provide a new modern day care facility, combined with doctors and elderly treatment services. The NHS would be charged a reasonable rate for those facilities. That seems a possible way forward for a number of our facilities in Gloucestershire.
	Will the Minister lay out a blueprint of the pitfalls and the way forward for such a scheme? In particular, the League of Friends is asking how much of the proceeds of the sale of Fairford hospital they are likely to receive to put forward for the new facility. Such questions need to be considered. The Minister should consider this innovative proposal, as it might get her off the hook in similar difficult situations.
	The situation of maternity services, about which the hon. Member for Stroud spoke, is one of the strands of the cuts that we are facing. As he said, he and I marched, along with 4,000 people, on a boiling hot day in Stroud on Saturday. We met young mothers and many of the children born at that hospital. About 400 young mothers a year have their children at Stroud maternity hospital. It is one of the few maternity facilities left in Gloucestershire, and if we lose that and the facility in Cheltenham, as the hon. Member for Cheltenham mentioned, all the young women will have to travel to Gloucester to have their babies. I was not making a disparaging intervention on the hon. Gentleman. I was trying to point out to him that if he is worried about the risk of patients travelling for 20 or 25 minutes from Cheltenham to Gloucester, the people from the north Cotswolds have first to travel to Cheltenham and then on from Cheltenham to Gloucester, so whatever the risk for his constituents, they are double for mine. If it takes 40 minutes to get there, I think it entirely possible that some babies, especially second babies, will be born in the ambulance long before they get to Gloucester.
	I think that there will be an increasing tendency for young mothers to have their babies at home. I am not a clinician and will not comment on that possibility, but we have been told for years that young mothers should have their babies in hospital because better care can be provided there. I think that more and more young mothers will choose to have their babies at home, particularly when no clinical danger is identified in pre-natal and post-natal classes. I am concerned about the large unit in Gloucester, and the hon. Member for Cheltenham has already mentioned the risk of MRSA. A small unit would be useful, because many mothers will not need to stay in it for very long.

Martin Horwood: I did not mean to dismiss the hon. Gentleman's concern about his constituents' drive times and accept his point. My point is that the percentage increase in drive times is probably greater from within the urban areas. When I asked the chief executive of the NHS trust about second children—my second child was born within minutes of getting through the doors of St. Paul's—and whether my child would have been born on the A40, he said that nature will take its course. Does the hon. Gentleman think that alarming?

Geoffrey Clifton-Brown: Yes; the situation will be even worse than the one I have described if babies are born in cars, rather than in clinical conditions in ambulances, as a result of the changes.
	Young mothers will have to travel further not only to attend the maternity unit, but to access pre-natal and post-natal care, which is a point that also applies to visits to young mothers who stay in hospital. It is difficult for hon. Members who represent urban areas to understand that public transport in areas such as the north Cotswolds is almost non-existent. It is difficult for someone who is about to have a baby and who may have other children with them to catch a bus from the north Cotswolds to Cheltenham and to change buses in Cheltenham to go on to Gloucester. People who are sitting in offices trying to plan larger and, in their view, better units sometimes fail to take into account the extreme difficulties of people who must travel to those hospitals, particularly when they do not have cars and live in rural areas. My PCT has estimated that every year patients in Gloucestershire travel 1 million miles to out-patient appointments. We are all concerned about global warming, and such distances seem distinctly unsustainable.
	One other aspect of the matter has not been emphasised sufficiently in debate this evening. At Friday's meeting with health chiefs, it was made clear that those people who are referred to the larger units in the acute hospitals in Cheltenham and Gloucester will be discharged more quickly, which means that they will require greater care. In the announcement several Wednesday's ago, however, we were told that community nurses, health visitors, physiotherapists and other at-home services would also be curtailed. We have got a lot of vacancies for community visitors in the north Cotswolds, and I think that when some people are discharged from hospital it will be impossible to deliver their home help care package, which will cause them hardship. I ask the Minister to consider that point carefully.
	I do not think that social services have been sufficiently involved in the discussions. As my hon. Friend the Member for Tewkesbury has said, the effect of the changes on other agencies has not been costed. As the hon. Member for Stroud has mentioned, a lot of voluntary transport activity goes on in my constituency. If patients are going to be discharged from hospital more quickly, they may be distressed and more difficult to transport. As we are finding from our constituency postbags, some of the people who have been discharged from hospital are not suitable for home care. That means that they must be readmitted, which is, again, an extra cost.

David Drew: I worry about patients with dementia who do not need to be in a clinical setting but who may need to travel periodically to the centre of excellence, which is a problem with the proposal to provide one unit at Charlton lane. Many such people will have to travel by voluntary transport, which is a difficult thing to ask a voluntary driver to take on.

Geoffrey Clifton-Brown: I agree. The matter concerns patients going to and from hospital not only for treatment, but for consultations. The distances will be much larger than those currently travelled to the community hospital.
	Will the Minister explain how my constituents in the Cotswolds will get better care closer to home? The Government and the PCTs have said that that will be the case, but I find it hard to believe if their community hospital is closed.
	Since I have been a Member of Parliament, the health service has been subject to constant reorganisation. When the Conservative party left office in 1997, there were area health authorities, which this Government reorganised into strategic health authorities. As has been said, there was one care trust for Gloucestershire, which was considered to be too big. It was reorganised into three primary care trusts, which are now considered to be too small and will be merged back into one PCT. Indeed, the SHA set up by this Government will be merged into at least two SHAs. All that reorganisation costs a great deal of money—it means that people are made redundant and that offices are closed. We should reorganise the health service now, but then we should leave it alone for 10 years.
	Is the Minister sure that the figures that she has been given by her health service chiefs are robust, because we do not want another round of cuts in Gloucestershire? I do not think that the cost of rebuilding all those new facilities has been properly calculated, and I do not think that the current cuts will be the last, although I look forward to receiving an assurance from the Minister that they will be.

Caroline Flint: Because of the curtailment of business earlier, this debate has been rather longer than the normal half hour, and all hon. Members present have taken advantage of the opportunity.
	The hon. Member for Tewkesbury (Mr. Robertson) has mentioned that the consultation document "The Future of Healthcare in Gloucestershire—Proposals for Developing Sustainable NHS Services"—I downloaded my copy earlier today—states that part of the core remit of those involved in developing and supporting health services locally is to promote good health. It is important to have that written down. As Public Health Minister, I would say that for too long, and too often, health improvement and promoting good health have been the poor relations in terms of providing treatment in our NHS services. In my 12 months in this post, I have begun increasingly to realise that we could do more not only to prevent people from having the conditions that mean that they go into hospital in the first place, but—now that technology and drugs are better than ever before for a person who has had, for example, a heart attack or cancer—to make the step change in helping that individual to look after themselves, having had possibly the best treatment in the world, and to keep themselves fitter and healthier for longer.

Martin Horwood: Given the Minister's responsibility for public health, is she concerned about the fact that savings proposal 15 is a cut in the public health promotion budget for smoking cessation?

Caroline Flint: I am glad that the hon. Gentleman makes that point. Historically, part of the problem is that public health has often lost out when pressure has been brought to bear on PCTs from the acute sector. As we move to a different place in which projects, programmes and interventions have an impact—in some areas, public health promotion could be better in terms of outcomes—we must have a discussion about how many of our services should be provided in hospitals, and how many of the services that are provided in hospitals should have a better link to community services, particularly for people with long-term conditions.
	This lunchtime, I was at a conference with the Local Government Association. We are continuing to work, more than ever before, on looking at the role of public health in relation to the way in which local government runs its business. Factors such as the development of housing, safer communities and the general environment all have a role to play in public health. As for smoking cessation, next year we will put in place legislation that will make most public places smoke-free. That will be a major contribution to changing the culture around smoking.
	To achieve a more mature, wide-ranging and long-term view of public health, we need to tackle the traditional situation in the health service whereby funding has overwhelmingly been directed towards those in the acute sector at the expense of those in the community. Painful choices are being made because of the need to deal with the deficits in a minority of organisations. That is causing problems even for PCTs that are in balance. My own PCTs in Doncaster—an area with huge health challenges—are in balance. In 1997 they were having to bail out other sectors of the NHS, but that was based on previous ways in which funding was organised and so was not done transparently—it was a fix designed to make everything look all right. It was not all right then, it was not all right in 1987, it was not all right in 1977, and it is not all right in 2006—but now we have an opportunity to try to get it right once and for all.
	I will deal as best I can with the points that hon. Members raised about financial balance. However, the important point is what will happen if we continue to stick our heads in the sand and do not deal with the problems that we face.
	As health services change, people's needs change as well. In relation to the consultation launched today on the different services in the Gloucestershire area, I will not deny for one minute that there is clearly a financial imperative. I have read the document and had discussions with hon. Members and health professionals in other regions that I cover, and it is clear that in trying to find a way forward we have to take into account people's understandable commitment to the health provision that they perceive that they are getting at the moment, as against what they might want in future. Those may be two different things. Someone who is 80 might want something very different from someone who is 60, and very different from what I, as someone in my 40s, might want when I am 70, 80 or even older. Part of this process—I am aware that it is a difficult one—is the honest discussion that people need to have about the services currently provided, and the shortfalls and problems involved, as against what else would be on offer.

Laurence Robertson: The Minister is absolutely right that we need a modern health service; I have said myself that it should not be a sacred cow that we are frightened to touch. But if it is right to cut management costs by 15 per cent., for example, that should be done anyway; we should not have to get to this crisis point. People will not accept that these changes are being made for the right reasons, because they read in the press that the NHS has severe financial problems and is cutting, not planning. The problem is that local health chiefs are not planning. The current situation is a reaction to their being told by the strategic health authorities that this year they have to balance all the books or else. The Minister is right to say that we have to move services on—I have no objection to that.

Caroline Flint: I thank the hon. Gentleman for that constructive contribution. I have met representatives of the strategic health authority and the primary care trusts. I hope that it is generally agreed that we cannot manage the health service from the centre, because the needs of one area are different from those of another and are affected by factors such as health challenge and geography. The decisions are best made locally.
	Perhaps some decisions should have been made previously, but people did not make them. They thought, "We don't need to face up to that difficult decision. We'll leave it for a couple more years. We've got some more funding coming from the Government. We've gone from £30 billion to £60 billion, and to £90 billion for the NHS in the next few years." The last sentence is the only mantra that I shall recite in the debate but it is true, and worth saying. People may have put off making decisions, but when somebody says, "Hang on, we've got sort out these finances, because you can't carry on like this," perhaps they will suddenly start to take notice. I am sure that the hon. Gentleman and others will make those points locally. I am sure that they will be raised with existing personnel and in the context of future reorganisation of PCTs. Managing the current position and, as the hon. Member for Cotswold (Mr. Clifton-Brown) said, ways in which to ensure that it does not happen again, will be considered. That is the Government's ambition. We would be a foolish Government if we wanted to revert to the problems again and again.
	That is why we believe that, difficult though it is and unpopular though it may be in some quarters, we must grab the agenda and deal with the problem—because it is clear from examining the information on some of the trusts that have got into deficit that unless the problem is tackled firmly, they do not get out of it, and it gets worse.

David Drew: I wholeheartedly support what my hon. Friend says. We are examining the detail of the White Paper "Our health, our care, our say", especially the part of it about which I have asked her previously, about moving "Care closer to home". She confirmed from the Dispatch Box in a previous debate that maternity services would be judged according to community criteria. May I push her a little further and ask whether that is true of mental health and learning disability services, which are also set in a community context? The partnership trust believes that they should not be judged by the same criteria, which I find strange, given that the people to whom they apply are most in need of being close to their locality and community. Will my hon. Friend say a little about that?

Caroline Flint: If someone has mental health or learning difficulties, or a long-term condition such as diabetes, or is recovering from heart treatment, it is clear from "Our health, our care, our say" that there is an appetite for services closer to home, for those provided in non-traditional ways and for some creativity in establishing partnerships to provide services—with the voluntary sector, local authorities and other groups. That also applies to prevention services.
	In several parts of the country, we are pioneering health trainers—a role that can take a variety of forms. They could be people from the community who will act as ambassadors. They may have suffered from a specific condition, or had, for example, a heart attack, and are therefore well placed to talk to others in that position about what they can do and what support exists to keep them healthy. Similarly, others could act as supporters and buddies. The opportunity exists not only for employed personnel to fill that role, but for others who simply want to give something back to their community. I shall raise the issue that my hon. Friend mentioned with the Minister of State, Department of Health, my hon. Friend the Member for Doncaster, Central (Ms Winterton), because she leads on mental health services.
	It is fair to say that for too long, insufficient thought has been given to integrating services for those with mental health problems with those of other providers in the community. The tendency has been to provide stand-alone services in a mental health service context. When I consider my constituency, my leisure centres and community organisations and groups, there is the challenge of whether those services meet the needs of different vulnerable groups in our community. That is important for people's general well-being.
	Treatment, and how we can provide the best treatment for the range of mental health problems, is another matter. Again, that must be decided locally. However, I shall get my hon. Friend the Member for Doncaster, Central to follow up some of the points that my hon. Friend the Member for Stroud (Mr. Drew) made this evening.

Geoffrey Clifton-Brown: I hope that the Minister will answer the core question about the criteria that the PCTs are being set—whether we are considering monthly balance or clawing back the deficit. The deficits have not arisen suddenly; they have existed for a long time. My constituents want to know why the crunch has suddenly come now, because that gives them the impression that the NHS is not budgeting properly. If the Chancellor can budget in his Red Book for a three-year programme, why cannot the NHS do that?

Caroline Flint: There are all sorts of reasons why some organisations have got into financial problems, as the hon. Gentleman will be aware. The traditional approach to this issue—which has been taken by this Government and previous Governments—was to shift resources around the health economy to bolster different organisations and help them out. My first meeting with the then Doncaster health authority involved discussions on that very issue. We talked about helping out other parts of South Yorkshire using the balances and surpluses in Doncaster.
	This has become an issue because of the reforms that the Government have set in place to improve the national health service. Also, with the introduction of payment by results, and of GP-based practice commissioning, it is important that the NHS should be in good financial order.

Martin Horwood: Will the Minister give way?

Caroline Flint: I want to make a bit of progress, otherwise I will not even get to the questions that hon. Members have asked this evening.

Geoffrey Clifton-Brown: We have until 10 o'clock.

Caroline Flint: That is true, but I have just looked at you, Madam Deputy Speaker, and I think that you might want to get away before then.
	It is important for the national health service to be in financial balance because it is fair to ask how the money going into the NHS is being used. All parts of the NHS in England have faced issues regarding targets, pay for staff, the agenda for change programme, and so on. They have managed all that and remained in balance. There is not just one reason for the problems. However, it is fair to ask those that are not in balance why they are not. Also, we need a system that will get them back into balance.

Geoffrey Clifton-Brown: We have suffered particularly in Gloucestershire because the Avon, Gloucestershire and Wiltshire strategic health authority had the biggest deficit in the country, at some £100 million. We are suffering because of the mismanagement in Bath and Bristol, and because for many years we have not had the capital allocations that other areas have had. Now the Minister is top-slicing us and giving some of our money away to Wiltshire, so we really are being hammered in Gloucestershire. I hope that she will take that into account.

Caroline Flint: I appreciate the difficulties experienced when areas that are in balance have to help out others. I, too, am in that situation locally to a certain degree. It is important that all Members whose areas are in similar situation should make this point locally, and ask clearly what they can expect back. This is not a process that will keep happening year in, year out. It is going to be put right, to provide a much more sustainable future. That is absolutely fair. From what I understand, trusts in deficit will have to provide to the strategic health authorities a clear plan for dealing with their deficit. This should also be open to the trusts that are in balance, so that those that are helping out in different ways will be clearer about what is being done to improve the situation.

Martin Horwood: The Minister repeatedly talks about the problems of tackling the trusts that are in deficit and their need to live within their means. However, the trust covering Cheltenham and Tewkesbury has lived within its means, but it cannot be repaid at some mythical point in the future, because it is merging with one of the trusts that is in deficit now. Local services are being hurt not only because of the top-slicing but because services that are shared with that neighbouring trust are being cut. So we are being penalised twice over.

Caroline Flint: I cannot be clearer than I already have been. I do understand the hon. Gentleman's point. However, we also have to work within a wider health economy than just one trust. People in Doncaster, for example, go to Sheffield for cancer treatment and to other parts of South Yorkshire for different services. Other people come to Doncaster from elsewhere for services. That is how the health community in which we live operates. We want access to the very best health care in some of the most challenging and demanding areas of health. That is something that we all sign up to. That is why we have to get this right, and why we have a responsibility to support each other within our local health economies. That is not letting anyone off the hook. That is what happened in the past and it was part of the problem.
	It is all about changes for the future. The amount of money going into the areas of hon. Members who have spoken in this evening's debate is substantial. There is no question that more money has been invested in the NHS. In all the constituencies of hon. Members in their places tonight, people have benefited from greater access to treatment faster than ever before. The minimum standards applied to our targets will continue to apply in the future, but to get to a place where we can think more creatively about provision of the services that we more or less all want, we have to deal with these financial problems and there is no easy route to achieve that.
	I want to highlight a few points about how health is changing. In the Gloucestershire area, more people are admitted to hospital than the national average and more people are spending longer there. I acknowledge the point of the hon. Member for Cotswold (Mr. Clifton-Brown) when he said, "Hang on a second—we should not be kicking people out of hospital who need to be there." Of course not. I have to say that I have heard some worrying stories of older people being kept in beds on hospital wards in unsuitable circumstances when they really would be better looked after elsewhere. I accept that it can be an issue around partnership with social services and it is sometimes the result of a baffling lack of co-ordination with respect to the particular problems.
	Let me provide one example relating to another part of the country. Someone was receiving acute care in an acute hospital for his condition and was then transferred to a bed in a smaller community hospital. Why could he not come out of that community hospital? Partly because he had been diagnosed with diabetes and an at-home service for insulin care and management could not be provided. In that context, discussions about support for that individual included the point that choices had to be made about whether to provide the relatively straightforward services that were needed in that gentleman's home in the community or whether he should spend four months in hospital until something was sorted out. There are legitimate debates about that choice.
	About 70 per cent. of people now have surgery as day-care patients, which is a huge change from the past. Nationally, the number of NHS beds has fallen by more than 30 per cent. over the past 20 years, while the number of NHS out-patients has risen by almost 60 per cent. That has changed over the decades, not just in the last few years. Of course, there are new technologies, better drugs, advanced surgical techniques and improved management practices— [Interruption.] The hon. Member for Cheltenham (Martin Horwood) keeps making comments from a sedentary position, but every time he raises questions about new drugs and other choices, it goes to the heart of the issue of trying to provide a health service that can meet people's needs, but needs to be managed locally.

Martin Horwood: rose—

Caroline Flint: No, I am not giving way again. I have already given way several times to the hon. Gentleman and responded even to his sedentary comments.
	The hon. Member for Tewkesbury raised some specific questions about Winchcombe hospital. I understand that, as part of the consultation, it is planned to enhance services at the Tewkesbury hospital, invest in community services and provide more rehabilitation and support in the home. The consultation will be for 12 weeks and he will be able to explore how that will happen—a pertinent question for the consultation.
	I understand that some of the Winchcombe hospital's problems relate to the building and that maintenance costs are £500,000 a year. The point was raised whether the hospital could be refurbished and used for other services, but it is felt that the fabric of the building is too old, so it would not be cost-effective to do so.
	I understand that out-patient and therapy services will be relocated and that, working in partnership, another eight beds will be provided elsewhere for rehab and palliative care. Clearly, those issues will be discussed as part of the consultation exercise. Certainly, in a number of areas, including Gloucestershire, as with other parts of the country, there are options that seek to enhance and improve some of the other community hospitals or services. I understand that one of the options for Dursley is to build a new health and social care facility in partnership with an independent sector provider.
	The hon. Member for Cotswold made a point about possible partnerships at Fairford hospital. It is difficult for me to comment to on that, but, clearly, he could have a conversation with PCTs and SHAs about any possible partnership development. Although the number of beds has been reduced at one facility—I think it was Tetbury hospital, which is an independent not-for-profit hospital; I look to the hon. Gentleman for reassurance and see that he is nodding—I understand that there is a discussion about how that service provider could provide more support and care in people's homes, rather than in hospital, and that it is keen to explore those opportunities.
	I will come to the financial balance, but I want to say something about maternity hospital services—an issue that has been raised by several hon. Members this evening. I have glanced at the report in  The Citizen local paper. Clearly, there was a well-attended rally on the issue at the weekend. As hon. Members will be aware, the proposal is that, over the next three years, all in-patient births at Stroud maternity hospital will move to Gloucester. I understand that there are just under 6,000 births in the Gloucester area, which services Cheltenham, Gloucester and Stroud, of which about 300 take place at Stroud hospital. Again, I am sure that that issue will be discussed as part of the consultation exercise, but that is quite a small number, and the birth rate is dropping, too.
	Clearly, considering what services need to be provided is an issue. This might not meet everyone's concerns, but I noticed in the article in  The Citizen that one lady was talking about the fantastic service that she received in having a midwife-led home birth. That service will continue, including, I understand, both antenatal and postnatal support. The difference is—I am not going to cover it up, because it is in the consultation—that in-hospital births at Stroud will be moved to Gloucester. However, I want to put on the record that antenatal and postnatal services and the opportunity for those women who want to have a midwife-led home birth will still be available to women in Stroud and the surrounding area.
	Again, this is a difficult issue. I have looked at the figures: women are having children older, which presents some issues. Women who have IVF treatment are more likely to have multiple births. Other issues need to be considered when providing consultant-led maternity services, particularly working times and the hours worked by consultants, as well as other health professionals. Again, those are factors in the provision of services. There are clearly financial considerations, as in everything, but there are some real issues about providing the best service possible, particularly to those most in need of that specialist service. Several Members have made points about the arrangements for getting to hospital in time, and there is no easy answer. Planning in relation to antenatal services is part of that process, and women and their partners and families need to be aware of what services are available and what arrangements they might need to make in such circumstances. Although I was in hospital for four days when I had my first child, times have changed, and for a straightforward birth, most people are in and out of hospital that day. Everyone wants to be there in the first few hours—I am not trying to mitigate that—but, for most people, days do not have to be extended for visits to their daughter or sister and her new child.
	On mental health, my hon. Friend the Member for Stroud (Mr. Drew) referred to the percentage contribution being asked from mental health services, which I will draw to the attention of the Minister of State, my hon. Friend the Member for Doncaster, Central (Ms Winterton), who has been monitoring how mental health services are being affected, the proportions involved and what the safeguards should be.
	All Members who have contributed to the debate this evening referred to the financial balance. As they will be aware, strategic health authorities are responsible for the performance management of their NHS organisation and for ensuring that they achieve financial balance. The aim is for the NHS as a whole to have returned to financial balance by the end of 2006-07. As I mentioned this evening and in a previous debate with my hon. Friend the Member for Gloucester (Mr. Dhanda), who asked similar questions, within an overall NHS balance position, a minority of NHS organisations might be unable to achieve a balance position within the time frame. However, all organisations that overspend will be expected to show an improvement during 2006-07. By the end of the year, every organisation should have monthly income covering monthly expenditure or a date by which that will be achieved in 2007-08. Strategic health authorities take a reserve at the start of the year, mainly from PCTs, and will not redistribute resources to overspending organisations but will allow them to return to financial balance across the patch with any deficits offset by the reserve held by the SHA. Reserves will have to be paid back to organisations in future years when the organisations currently in deficit start producing surpluses.
	The key benefit of the new system is that it provides financial certainty as reserves will be lodged from the start of the year. That means that SHAs will not need to spend time and energy later in the year trying to persuade organisations to underspend and produce a surplus. Despite the difficulties, that has tended to be the way that it has worked—people have planned for a year and then been asked to pull back later in relation to the year ahead. Trevor Jones, chief executive of Avon, Gloucestershire and Wiltshire SHA, said in his letter of 7 June that there is
	"a clear requirement for NHS bodies to achieve in-year balance and to recover 2005/06 deficits...In exceptional circumstances, organisations formally included in the Department of Health's 'turnaround programme' may be allowed more time to recover the 2005/06 deficit. In Gloucestershire, only Cotswold and Vale PCT is receiving turnaround support and it will receive £6.8m from the PCT pool in 2005/06 which must be repaid in later years."
	That is saying that organisations must show that they are in balance in terms of their monthly income and expenditure, but that the pool provided allows the SHA to show that the whole local health economy is in balance against the deficits. That recognises that recovering some deficits might take more time in certain areas.
	That issue will have to be explored locally, but it must also be recognised that the recovery of deficits cannot keep being put off until tomorrow. That is why consultation, not just about finance but about creating a health service that is better for the future, is so important. We need systems that will improve outcomes, but will also put the service on track to achieve a meaningful financial balance that is not just secured through the reserve produced by the strategic health authority.

Geoffrey Clifton-Brown: I think that the Minister is eliding two requirements. One is the return to financial balance by the end of the financial year: it seems that by the end of March next year, provided that primary care trusts are back in balance, the first of the Minister's criteria will be met. However, the Minister confused the issue by quoting from a letter from Trevor Jones saying that past deficits must be recovered by the end of the financial year. That is a much stricter and more stringent criterion than our PCTs have been led to expect. Are they to expect the first, or the first and the second?

Caroline Flint: I think it is a combination of the two. Organisations must ensure that their income and expenditure are in balance on a monthly basis by the end of the year, but must also establish plans to show how they will recover their deficits. By pooling reserve money, SHAs are helping to ensure that the whole health economy is better protected against the deficits that some areas are facing. I shall be happy to write to the hon. Gentleman, but I can say no more than that. All organisations that are overspending will be expected to show an improvement during the current financial year, and by the end of the year every organisation should have monthly income covering monthly expenditure or give a date by which that will be achieved in 2007-08.

Laurence Robertson: rose—

David Drew: rose—

Caroline Flint: I will give way to my hon. Friend the Member for Stroud first. Then I will give way to the hon. Member for Tewkesbury, as he initiated the debate.

David Drew: The Minister will understand why we feel so much in need of clarification. I have seen the correspondence from and to the chief executive of the SHA. I would not like it, but I think that I would understand, if all parts of the SHA worked with the same rigour that is being requested of Gloucestershire, but I ask the Minister—if nothing else—to examine the figures from the different parts of the SHA. I cannot see that other parts of the authority are being asked to face the same pain as Gloucestershire. If they are, can the Minister make that clear in the letter that she is going to send us?

Caroline Flint: I shall be happy to follow that up.

Laurence Robertson: I think the hon. Member for Stroud (Mr. Drew) made the point that I intended to make, but I will say this. I am grateful to the Minister for her sympathetic approach and I think we all accept that the organisations should be in monthly balance by the end of this financial year. That is a sensible requirement, to which we have never objected. We should like to know, however, whether the requirement for everything to balance—including historic deficits—relates to this financial year. Could it be extended to, for example, three years? That would make all the difference. I realise that the subject is hugely complicated, but perhaps the Minister could focus on that when she returns to it.

Caroline Flint: As I have said, the problems in different trusts must first be identified, along with the amounts of money involved. The trusts will be expected to produce a financial plan to turn their position around, although we want to see a monthly financial balance. As I have said, I will write to hon. Members including my hon. Friend the Member for Stroud. My hon. Friend made a point that I intend to follow up.

Martin Horwood: I am grateful for the Minister's patience in giving way to me again.
	Part of the problem may be the term "monthly balance". That may be what we are struggling with. Does that mean monthly balance in terms of the normal revenue income and expenditure that trusts would have if there were top-slicing for deficits, or does it mean monthly balance including the need to meet the top-slicing requirement? Can she clarify that?

Caroline Flint: I understand that it is in terms of income and expenditure, but there is also the issue around the outstanding deficits that organisations have. Those have to be dealt with too. Part of the top-slicing that is happening in those parts of the health sector or health trust that are in balance is to try to ensure that there is, if you like, shared responsibility for maintaining health across communities, to follow up on the point that my hon. Friend the Member for Stroud made about what is being asked of different parts of the health service in his strategic health authority area to deal with particular problems and issues.
	That still requires an openness to debate some issues that involve some hard decisions and hard choices about the services that are necessary for the future. It raises issues around engaging the public. Importantly, as I said earlier, it involves having a discussion about what sort of services people want but also, in order to get those services, what is necessary. It is undoubtedly the case that, with the best will in the world, for some of our most advanced services to get the personnel to provide the best techniques in certain areas of health in our hospitals, some consolidation is necessary.
	It is also clear that, particularly in respect of older people, we have to address some legacy issues of community hospitals, which were created with the best intentions, and to consider whether they can meet the needs of the future. I raise another issue in relation to health staff. Talking to a nurse the other week, I found that one of the problems has been that, in some of our community hospitals—as I say, I do not know enough about all the individual community hospitals in hon. Members' areas—the sort of service that they are offering, which is at its best a holding bed for older people, is not providing training and other opportunities for staff who want to work in this sector, particularly those who want to work closer to where people live in the community, providing a 24/7 district nurse service, for example, for people who most of the time do not need to go into hospital. They could get the services they need at home, with little disturbance to their life and none of the problems about relatives having to try to visit them and all those other things.
	We have had an interesting debate. I hope that we have explored, possibly in a wider way, some of the challenges that face the health service. It is about value for money but importantly it is also about dealing with a problem which has been happening for many years in respect of the way in which health has been funded. It is also about dealing with perhaps some decisions that should have been made earlier about the sort of health service we want, which as I said is about prevention and support as well as treatment. However, to get to the place where we can have that discussion and start thinking about a 21st-century health service, undoubtedly, these problems have to be resolved financially but also in terms of the organisation of services.
	 Question put and agreed to.
	 Adjourned accordingly at three minutes past Nine o'clock.